The Shutdown of The Paradip Refinery Would Substantially Impact the Indian Petrochem Market

The Shutdown of The Paradip Refinery Would Substantially Impact the Indian Petrochem Market

  • 05-Aug-2022 4:02 PM
  • Journalist: S. Jayavikraman

The Paradip facility of Indian Oil Corporation Ltd. (IOCL) in the Jagat Singhpur district of Odisha will be under shutdown for 40 days beginning in August and continuing through mid-September for an unspecified cause. As per ChemAnalyst, sources claimed that Indian Oil Corp. had postponed all its maintenance plans from March and April to the month of August and mid-September for the Paradip Refinery.  IOCL has been using tenders to source oil for delivery after purchasing 9 million barrels of emergency supplies.

India's demand, particularly for LLDPE, HDPE, Polypropylene, MEG, LPG, and others, is therefore anticipated to get affected by the shutdown. This will further hamper the output and supply of the above-mentioned products in the domestic and international markets. Local merchants will likely fill up their inventories to cope with the downstream demand.

The organization now analyzes the projects' potential and shifting demand and supply fundamentals. The refiner claimed that despite the pandemics and war's ripple effects, the demand pattern has not been destroyed but has been affected. According to IOCL's top executives, the country's gasoline demand would probably reach its pre-lockdown level in three months. The company also plans to build hydrogen storage solutions and fuel cells to prepare for green mobility in the upcoming years.

Mono-Ethylene Glycol, LLDPE, and HDPE prices will probably follow the crude oil market pattern, with fluctuating crude oil prices keeping petrochemicals costs high, as forecasted by ChemAnalyst. Furthermore, it is anticipated that several unit closings and a lack of supply will increase the prices.

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