India to remain bright spot for petchem demand in 2025

Petronet LNG

14/02/2025 07:18

By Mohi Narayan
       NEW DELHI, Feb 14 (Reuters) - India will be a bright
spot for petrochemical demand in 2025 even as global consumption
lags supply, amid rising demand for electric vehicle parts,
solar panels and household appliances, industry executives said
on the sidelines of India Energy Week conference.
    "We are seeing good local demand in the sectors like
propylene where our company operates," Bharat Petroleum's
 BPCL.NS  director of refineries Sanjay Khanna said.
    Indian Oil  IOC.NS  Chairman A S Sahney said demand is
expected to remain resilient this year.
    Petrochemicals are used in key building blocks for a variety
of goods such as plastics, paints, and pharmaceuticals.
    Ganesh Gopalakrishnan, TotalEnergies's  TTEF.PA  global head
of petrochemical trading, said there is good demand from the
automobile sector while white goods consumption is recovering.
    However, global petrochemical margins are expected to stay
depressed for a few more years amid weak demand from top
petrochemical consumer China and excess supply from new Chinese
and Middle Eastern plants.
    "The industry is waiting for China to announce its big
incentive plan in March," said TotalEnergies's Gopalakrishnan,
adding that this could spur China's demand and improve global
petrochemical margins.
    Refiners in India have been insulated from losses because
they produce their own petrochemical feedstock naphtha, margins
have been negative in the last 3-4 years for standalone plants
which rely on imported feed, said Pankaj Srivastava, an analyst
at consultancy Rystad Energy.
    Meanwhile, investments continue to pour into India. The
country is expected to receive $87 billion worth of investments
in the next decade to meet the nation's rising demand for
petrochemicals, the country's oil minister Hardeep Singh Puri
said last year.
    He said India consumes 25 to 30 million metric tons of
petrochemical products annually, and the chemical and
petrochemicals sector, currently valued at $220 billion, is
expected to grow to $300 billion by 2025.
    Companies such as Nayara Energy and Haldia Petrochemicals
have already announced plans to boost production.
    Petronet LNG is setting up a petrochemical complex of
750,000 metric tons-per-year (tpy) propane dehydrogenation unit
and 500,000 tpy polypropylene unit in the western state of
Gujarat.
    "The downturn in petchems has always been cyclical and we
hope margins will recover in next three years," Petronet LNG
Chief Executive Akshay Kumar Singh said. 

 (Reporting by Mohi Narayan; Editing by Florence Tan and Michael
Perry)
 ((Mohi.Narayan@thomsonreuters.com; https://twitter.com/_mohi_;))