Petrochem profitability may remain muted due to oversupply: CareEdge

HIGH IMPORT DEPENDENCE coupled with strong consumption of major petrochemicals has resulted in domestic companies expanding their capacity across key petrochemical product segments, especially in polyvinyl chloride (PVC) and polypropylene (PP), said CareEdge Ratings in a report on Monday.

- MANU KAUSHIK

While the PP capacity is expected to increase by 1.8 times between FY25 and FY30, the PVC capacity is expected to jump higher at 2.5 times relative to existing capacity.

Despite the substantial surge in domestic capacity over the next four years, the agency said that the profitability of Indian manufacturers would still be dependent on cost competitiveness, the global demand-supply scenario, and need-based support from the government. Also, prices and spreads in the domestic petrochemical sector are expected to remain weak in the near term due to global oversupply.