Indian polyacrylic acid prices rose by 1.8% in September compared to August, with CFR JNPT prices firming up due to high import costs and logistics issues. The increase despite subdued downstream demand was due to tightness on the supply side and trade channel disruptions influencing market sentiment for the month.
India's imports of polyacrylic acid, particularly from the Netherlands and Germany, were significant factors in price evolution. The port of Rotterdam operations were severely affected due to poor weather conditions and infrastructure issues. RWG and APM2 terminals were shut down mid-September due to high winds, and the ECT terminal was grappling with mechanical failures, gang inadequacies, and feeder delays of up to 24 hours. The RWG yard density reached 81%, almost at working capacity. In Hamburg, breakdowns in IT systems and rail network disruptions contributed to the delay, with the CTA terminal being put into an extended reconstruction that will reduce berth capacity until mid-2026.
These wharf-side challenges caused delayed deliveries and scant availability of polyacrylic acid in India, forcing traders to tip offers higher. With the logistical headwinds, domestic polyacrylic acid demand was smothered across key end-use sectors.
In the personal care and cosmetics category, market leaders such as HUL, Dabur, and Marico saw a temporary pause in September due to the introduction of GST 2.0 reforms. The announcement of the new tax system on September 4th was followed closely by reductions to duties on daily essentials on a daily basis, causing distributors and consumers to postpone buying decisions, in anticipation of price changes, thus limiting significant growth for polyacrylic acid polymers. Dabur witnessed temporary moderation in retail sales, while HUL reported near-flat growth due to inventory liquidation and deferment of orders. Marico too had the same concerns, though it looks for long-term restoration of demand due to reforms generating affordability and purchasing power.
Demand of polyacrylic acid for pharmaceutical use remained flaccid, while the water treatment sector faced operational disruptions. In Delhi, the Wazirabad water treatment plant was shut down for 36 hours due to continual flooding from the swollen Yamuna river. Public health concerns contributed to reduced chemical consumption, including polyacrylic acid.
During September, India's textile sector experienced a divergent demand scenario driven by the introduction of GST 2.0 reforms. The GST Council's decision to cut taxes on apparel priced under ?2,500 gave a new lease of life to the entire sector, with participants looking forward to affordability and consumption. However, the transition phase created temporary trade bottlenecks related to channels, with retailers and consumers delaying purchases in anticipation of the repricing. As traders wanted to sell higher valued inventory, consumers postponed buying products that were covered under the timing of the new taxation system, effective September 22.
In spite of the softness in polyacrylic acid demand, the synergy of import delays and prudent inventory management was a source of support for the polyacrylic acid price increase. Market players expect demand to pick up gradually during the festival season, helped by decelerating inflation, a favorable crop scenario that could drive rural consumption, and a policy boost.
In the short term, polyacrylic acid prices will be supported in October, as supply-side tightness and sentiment revival will offset residual demand dislocations from GST. Ongoing monitoring of European port action and domestic polyacrylic acid consumption patterns, however, will continue to play a critical role in defining polyacrylic acid pricing.
