The petrochemical industry in India is facing lockdowns and restrictions imposed by the government to curb the coronavirus spread. Some market participants told SSESSMENTS.COM that they expected a decline in petrochemical demand and production in the coming weeks due to the measures. The Indian government has put the capital Delhi under lockdown since Monday until the end of March. Some regions also implement voluntary curfews.
Industry sources told SSESSMENTS.COM that state-owned IOCL maintained operations at its 800,000 tons/year cracker in Panipat and downstream units producing monoethylene glycol (MEG), purified terephthalic acid (PTA), paraxylene (PX), and polymers. State-owned GAIL also keeps production at its two crackers in Uttar Pradesh with a combined capacity of 900,000 tons/year.
Reliance Industries (RIL) is still running production at its crackers in Gujarat and Maharashtra which can produce up to 3.5 million tons/year of ethylene. Haldia Petrochemical is also operating its 700,000 tons/year cracker and downstream plants in West Bengal.
Market players informed SSESSMENTS.COM that transportation and distribution of products such as methanol and polymers might be disrupted by the closure of non-essential businesses and the lockdown of major cities. Chemicals are distributed to 29 Indian states through land-based transportation. The government of Maharashtra ordered people to work from home and shut businesses in Mumbai, a petrochemical trading hub in India.
Market participants expected methanol demand to weaken in the coming weeks due to the restrictions although supply from Iranian producers is limited. Demand for polymers is also expected to fall because of the domestic slowdown and rupee depreciation against the US dollar.
