India’s polymer demand has risen by 12 percent in the financial year 2022-23, due to a sharp pick-up in consumer activities after over two years of the pandemic-induced economic slowdown. Also, moderating retail inflation has provided a breather to consumers and eventually boosted overall sales of retail products in the last few months. Polymer demand remained robust in the last financial year, as it is widely consumed across product sectors from packaging to automotive equipment.
Data presented by the industry leader Reliance Industries Ltd (RIL) to the company’s investors and shareholders showed India’s overall polymer demand at 17.1 million tonnes for the financial year 2022-23, compared to 15.3 million tonnes reported in the previous year. Polyethylene (PE) demand is reported to have increased by 8 percent to 7 million tonnes in the financial year 2022-23, while polypropylene and polyvinyl chloride (PVC) demand jumped by 6 percent and 32 percent to 6.4 million tonnes and 3.7 million tonnes, respectively, compared to their figures of 6.1 million tonnes and 2.8 million tonnes in the previous financial year.
Polymer demand in India (million tonnes) |
Particulars | Financial year | Growth (%) |
2021-22 | 2022-23 |
Full year |
Polymer | 15.3 | 17.1 | 12 |
Polyethylene (PE) | 6.4 | 7.0 | 8 |
Polypropylene (PP) | 6.1 | 6.4 | 6 |
Polyvinyl chloride (PVC) | 2.8 | 3.7 | 32 |
Fourth quarter |
Polymer | 4.1 | 4.9 | 20 |
Polyethylene (PE) | 1.7 | 1.9 | 11 |
Polypropylene (PP) | 1.6 | 1.7 | 8 |
Polyvinyl chloride (PVC) | 0.8 | 1.3 | 67 |
Source: Reliance Industries Ltd presentation
During the fourth quarter of the financial year 2022-23 i.e. January-March 2023, India’s overall polymer demand grew by 20 percent to 4.9 million tonnes as against 4.1 million tonnes reported in the corresponding quarter last year. The country’s PE and PP demand shot up by 11 percent and 8 percent to 1.9 million tonnes and 1.7 percent, respectively, in the January-March 2023 quarter, compared to 1.7 million tonnes and 1.6 million tonnes in the same quarter the previous year. However, PVC demand during the quarter escalated by 67 percent to 1.3 million tonnes, as against 0.8 million tonnes in the comparable quarter the previous year.
Polymer deltas in India (US$/tonne) |
Particulars | Financial year |
2021-22 | 2022-23 |
Full year |
PVC-Naphtha/EDC | 572 | 474 |
HDPE-Naphtha | 426 | 362 |
PP-Naphtha | 529 | 360 |
Fourth quarter |
PVC-Naphtha/EDC | 450 | 482 |
HDPE-Naphtha | 325 | 340 |
PP-Naphtha | 412 | 367 |
Source: Reliance Industries Ltd presentation
CPMA estimatesThe apex industry body, the Chemicals and Petrochemicals Manufacturers’ Association (CPMA), in its annual report published for 2022, projected India’s overall polymer demand at 17.05 million tonnes for the financial year 2022-23, a rise of 7.2 percent from 15.9 million tonnes reported in the previous fiscal year. India’s polymer demand had increased by 7.7 percent in the financial year 2021-22 from 14.78 million tonnes in the preceding year.
CPMA estimates India’s cumulative polymer production at 13.69 million tonnes, at 90 percent of factories’ operational capacity in the financial year 2022-23, as against 12.86 million tonnes of actual output reported with the same operating rate in the previous financial year. Presently, India has a total production capacity of 15.14 million tonnes, a marginal increase from 14.23 million tonnes in the previous year.
Unfortunately, nearly a fifth of India’s polymer demand is met through imports. In the financial year 2022-23, CPMA estimates India’s polymer import at 3.93 million tonnes. Considering a total export of around 636,000 tonnes, India’s polymer trade deficit is estimated at 3.3 million tonnes, according to CPMA. While polymer exports declined substantially over the years, imports have increased.
Global marketsAs a product, the polymer is used in everyday life and therefore has very high growth potential, especially in sectors like construction, automotive, electrical, and electronics which have witnessed a manifold increase in plastic demand over the last few years. Contrary to the myth that plastic is a product for the packaging industry only, various articles made of rigid and flexible plastics are used in almost every walk of life. These articles are lightweight, flexible, and strong something equivalent to rigid metals. With their recycling value and therefore a big contribution to the circular economy, plastic is cost-effective and easy to carry, and Its demand is likely to accelerate further in the future.
According to reports, the global polymer market is estimated to be worth US$659.81 billion in the calendar year 2022 and is now poised to grow with a compounded annual growth rate (CAGR) of nearly 5 percent, reaching US$1,046.15 billion by 2030. Another contributing factor is the increasing polymer demand from the construction industry, especially in emerging economies such as India, China, and Brazil, among others. Increased foreign direct investment (FDI) in the construction sector is set to provide a boost to the global polymer demand.
The pandemic-induced stagnationThe global polymer demand remained stagnant with flat consumption recorded in FY 2019-20 and FY 2020-21. According to CPMA, India’s polymer demand also stagnated at around 14.7 million tonnes during both pandemic years i.e. 2019-20 and 2020-21. Not only the demand, but its production also remained flat at around 12.4 million tonnes during FY 2019-20 and FY 2020-21, against India’s overall capacity of 14.2 million tonnes.
The Covid-19 pandemic outbreak began in China in November 2019 and gradually spread to the world with passengers traveling from the infected country. Triggered by a robust demand from non-feed and food packaging, personal care, etc. the demand for polymer remained strong even during the pandemic years, barring reduced consumption from automotive and allied industries. On the other hand, polymer demand went up for manufacturing personal protection testing (PPT) kits, gloves, masks, and medical equipment, including syringes.
Bright future aheadPolymer demand in India is likely to remain robust in the next few years. CPMA forecasts India’s polymer demand to record 6.4 percent growth to 18.14 million tonnes in the financial year 2023-24, with its production to remain at 14.84 million tonnes out of 16.08 million tonnes of overall installed capacity. However, India would continue to remain import dependent to the tune of up to 3.28 million tonnes this year due to lower availability from domestic sources. Hence, domestic producers see no dearth of demand especially in the wake of robust economic growth.
DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com