PP and PE Prices Decline Across China and India Amid Regional Downtrend

Key Highlights

• China’s PP & PE futures hit multi-year lows post-Golden Week due to high stock levels.
• RIL reduced PP prices by ₹1,000–1,500/MT; PE prices remained unchanged.
• Demand from packaging and film sectors remained below seasonal trends.
• Market expected to stay range-bound with cautious buyer sentiment.

Asian Polyolefin Prices Slide Amid High Inventories

Polyethylene (PE) and Polypropylene (PP) prices continued to fluctuate through early October, reflecting a weak demand outlook and ample supply in Asian markets.

• China:
  After the Golden Week holidays, polyolefin futures on the Dalian Commodity Exchange dropped to multi-year lows due to unexpectedly high inventory levels. Spot PP and PE prices in China declined by 50–100 yuan/ton, pushing international suppliers to cut offers to stay competitive.
• India:
  1. Middle Eastern homo-PP offers to India declined by $10–30/ton compared to last month, following the regional downtrend. Indian buyers, however, showed muted interest amid rupee volatility and a preference for domestic material.
  2. Reliance Industries Ltd (RIL) revised PP Domestic Homopolymer prices downward by ₹1,000/MT and Copolymer by ₹1,500/MT, effective 9th October 2025, while PE prices remained rolled over. 
• Market Drivers:
  The primary drivers behind the decline include weak downstream demand, high inventory, and cautious procurement by converters. On the cost side, crude oil prices remained firm due to geopolitical tensions in Russia and Ukraine, offering some cost-side support to PE despite overall bearish sentiment.

Indian Market Sees RIL PP Price Cuts; PE Unchanged

The PE industry’s operating rate in September stood at 80.38%, slightly higher than the previous month, indicating adequate supply availability. However, demand remained below seasonal expectations despite the traditional peak period.

1. The greenhouse film and plastic film sectors recorded slower-than-expected offtake.
2. Downstream converters maintained rigid procurement patterns, prioritizing immediate needs rather than restocking.
3. Inventory reduction by traders and producers continues, but limited buyer participation kept the overall sentiment weak. 

On the PP front, supply remained stable while demand from packaging and injection molding segments softened due to seasonal slowdown and currency-related uncertainties in South Asia.

Market News: Weak Downstream Demand Weighs on Film & Packaging Sectors

• RIL Early Bird Incentive (1–18 Oct’25): ₹2,500/MT for PP (Domestic) and all PE grades.
• RIL PVC APR-linked Incentive: ₹1,000–₹2,000/MT discount depending on lifting volume (≥7% to ≥8.33% of annualized quantity).
• Dow Freeport Plant Disruption: Minor operational issues reported; impact on global PE supply expected to be minimal as most shipments are for Nov–Dec.
• No incentive scheme (X/Y) announced for PE & PP international offers this week.

Short-Term Outlook: Range-Bound Market with Weak Bias

In the coming weeks, the polyolefin market is expected to remain range-bound with a weak bias:

1. PE: Sufficient supply and muted downstream activity will likely keep prices under pressure, though firm crude oil prices may limit the downside.
2. PP: Further price corrections are anticipated as import offers may approach $800/ton CIF India in the near term.
3. Buyer sentiment is expected to stay cautious until post-Diwali demand revival signs emerge and currency fluctuations stabilize.

Overall, the market is likely to operate under weak oscillation, with cost-side strength counterbalanced by sluggish demand.