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India’s demand for polymers could increase 12.3% this year as part of post-Covid economic recovery

After nearly two years of weakness, Indian polymer demand is expected to rebound with robust growth in the current fiscal year 2021-22 due to a strong recovery in economic activity due to a sustained decline in prices. new cases of coronavirus (Covid) in the country.

Data compiled by the Chemical and Petrochemical Manufacturers Association (CPMA) showed that India’s polymer demand could increase by 12.3% in fiscal year 2021-2022, the highest in four years on a phenomenal increase in the consumption of finished products which use polymers as raw material. The government’s unlock plan has allowed consumers to visit retail stores and purchase whatever product they want, in much the same way as before the start of the Covid pandemic.

ON A ROBUST GROWTH PATH

India’s Polymer Balance (million tonnes)

Financial year (April – March)

Capacity

Production

Demand

Demand growth (%)

2018-19

13.11

12.05

14.85

9.5

2019-20

14.13

12.50

14.80

(-) 0.3

2020-21

14.13

12.35

14.80

0.0

2021-22E

14.69

13.54

16.62

12.3

2022-23E

14.95

14.41

17.69

6.4


The CPMA estimates India’s demand for polymers at 16.62 million tonnes for fiscal year 2021-2022, compared to 14.80 million tonnes the previous year. The association further estimates that India’s polymer consumption will grow 6.4 percent to 17.69 million tonnes in fiscal year 2022-2023. It’s worth mentioning here that India’s daily new cases of Covid have fallen to around 8,000 now, from a peak of over 400,000 in the April-June 2021 quarter.

“After recording negative growth in 2019-2020, polymer consumption growth in India remained stable in 2020-21 due to nationwide lockdowns and declining demand. However, going further in 2021-2022, demand is expected to rebound significantly and grow at a rate of 12.3%, ”says a report from the CMPA.

Over the past two years, demand for polymers from India has remained almost stable due to reduced plant activity, intermittent blockages and restricted movement. With a huge increase in the number of new cases of Covid in April – May 2021, popularly known as the second wave, consumer demand has been hit hard. In 2020-2021, India’s polymer industry (like the global industry) was dominated by polyolefins (polyethylene or PE and polypropylene or PP), accounting for around 77% of all base resins consumed.

Meanwhile, dependence on polymer imports fell by 25% in 2020-2021 and is expected to remain at about the same level over the next two fiscal years. In 2020-2021, the net trade deficit of total polymers was 1.85 million tonnes, which is lower than the previous year which was 2.79 million tonnes. It is expected to increase further in 2021-2022 to reach 3.18 million tonnes and another 3.32 million tonnes by 2023.

The 2020-21 fiscal year has been an unprecedented year for the global petrochemical industry and India has not been immune to global developments, according to the report. Due to the Covid pandemic epidemic, countries around the world have announced full closures and a ban on domestic and international travel. This had a negative impact on global economic activities at the start of 2020-2021.

However, the business environment started to improve in the second half of 2021. Consumer demand rebounded again afterwards, after a drop in the number of new cases of Covid. In the current year, the demand for polymers in India could therefore experience a marked growth this year.

Ajay Daga, Partner, Daga Plastics Industries, a manufacturer of hard plastic products based in Kolkata, said: “Demand for polymers in India has returned to pre-pandemic levels and even higher with the opening of factories. and retail stores. The demand for finished products has also increased proportionately. There is a severe shortage of available polymers, which is driving up its prices. “

During the Covid pandemic, the government announced periodic intermittent shutdowns that affected plant production and ultimately supply. Imports of polymers have also been reduced in the last two years of the Covid pandemic period due to transportation disruptions and skyrocketing container and freight costs.

Echoing a similar response, Surendra Sharda, director of Ahmedabad-based Acura Polyplast Pvt Ltd, the producer of BLP-branded plastic products, said, “Demand for polymers in India has picked up after two years of weakness. With the economy back on track, demand for polymers from India is expected to remain strong over the next few years. “

Data compiled by the Indian government’s Department of Chemicals and Petrochemicals showed India’s polymer production to jump more than 17% to 3.75 million tonnes for the period April to July 2021 (latest data available) against 3.20 million tonnes in the corresponding period last year. India’s olefin production also increased to 3.95 million tonnes between April and July 2021, from 3.3 million tonnes reported in the same period last year.

To support the move, Union Finance Minister Nirmala Sitharaman allocated 233.14 crore rupees ($ 32.2 million) to the Ministry of Chemicals and Petrochemicals in the 2021-22 Union budget. to support policy initiatives such as the incentive program linked to production and in turn stimulate the domestic market. manufacturing and exports.

DILIP KUMAR JHA
Editor
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