Chemicals - Petrochemicals

No material recovery in spreads of commodity polymers as the sector still grapples with supply overhang

Half-yearly Update 21 Aug 2025

Global overcapacity amid no major recovery in demand, continues to weigh heavily on the operating rates and profitability of petrochemical companies worldwide. In the domestic market, the commissioning of new capacities coupled with an influx of low-cost imports has compressed margins for petrochemical producers, despite resilient local demand. This challenging landscape is likely to persist in the near to medium term. 

  • The global demand for petrochemicals continue to remain tepid, especially in some of the major chemical-consuming nations, which is likely to keep the global volume growth under pressure in the near term.
  • Sizeable capacity expansions globally, especially in Asia, have exerted pressure on the operating rates of petrochemical companies. The supply overhang is likely to keep the operating rates, spreads and margins subdued in the near to medium term.

Exhibit: Trend in industry revenues and revenue growth


Source: ICRA Research; Data for ICRA’s sample; ICRA’s sample set for the sector does not include large diversified players such as Reliance Industries, GAIL, and IOC as performance of other segments would distort the performance trend of the former

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