- Naphtha falls sharply, while domestic feedstock costs remain elevated
- Virgin PET offers soften, but tight scrap availability supports recycled market
India’s polyethylene terephthalate (PET) value chain showed mixed trends during the assessment week ended 7 August 2026, as a sharp correction in crude oil and naphtha was offset by elevated domestic feedstock prices and tighter availability across parts of the PET chain. Brent crude fell below USD 80/bbl during the week as easing US-Iran tensions and prospects of improved shipping through the Strait of Hormuz reduced supply-risk premiums, before recovering towards USD 84/bbl as renewed tensions around Hormuz restored some risk premium.
The virgin PET market weakened in spot and import channels during the week, with offers declining by around INR 5-8/kg from the previous week. Domestic producers, however, maintained the basic PET price at INR 133.10/kg and subsequently announced a INR 2/kg early-bird discount with price protection until the next revision. The move encouraged some increase in procurement, although buying remained largely need-based. In contrast, the recycled PET market remained comparatively firm, supported by tight availability of post-consumer bottle bales despite softer demand expectations and pressure on some rPET grades.
Weekly price movement
Crude oil
Crude oil prices declined sharply during the first half of the week as easing geopolitical tensions reduced the supply-risk premium. Brent fell from around USD 84/bbl at the start of the week to below USD 79/bbl on 5 August, extending losses as progress in US-Iran negotiations and expectations of improved shipping through the Strait of Hormuz eased concerns over potential supply disruptions.
Brent remained near USD 79/bbl on 6 August as a temporary Hormuz shipping route helped reduce immediate supply concerns, although continued risks around Red Sea shipping provided some underlying support. Prices recovered on 7 August, with Brent rising above USD 83/bbl after Iran proposed stricter transit rules for commercial vessels, reigniting concerns over the security of oil flows.
The decline in crude prices nevertheless reduced upstream cost pressure compared with the previous week, when Brent had been supported by heightened Middle East tensions. The correction also translated into a sharp decline in naphtha values during the week.
Feedstock market
The polyester feedstock chain experienced a sharp divergence between global and domestic pricing during the week. Naphtha CFR FEA, which had reached an eight-week high of USD 1,000-1,005/MT in the previous week, declined to USD 725-730/MT by 7 August. The steep correction followed the easing of geopolitical risk premiums and lower crude prices, with naphtha falling to USD 720-725/MT on 6 August before recovering marginally at the end of the week.
Despite the decline in naphtha, domestic polyester feedstock prices remained elevated. RIL’s Mixed Xylene prices stood at INR 125/kg ex-Hazira and INR 124/kg ex-Patalganga, while MEG was assessed at INR 70.30/kg. PTA stood at INR 91.50/kg. On a weekly basis, Mixed Xylene and MEG remained significantly higher than the previous week’s levels, providing continued cost support to the domestic PET chain.
RIL increased PTA, MEG, DEG and Mixed Xylene prices effective 1 August, indicating sustained upstream cost pressure despite the correction in global crude and naphtha. The divergence between falling imported feedstock costs and firm domestic company prices is likely to remain an important factor for PET producers’ pricing decisions in the near term.
Longer-term domestic feedstock availability could also receive support from Chennai Petroleum Corporation Ltd’s planned 33% refinery expansion, which would increase refinery capacity to around 280,000 bpd. Separately, ONGC reported record Q1 FY2026-27 earnings, with net profit rising 112% to INR 17,034 crore and revenue increasing 45%, highlighting strong performance across India’s upstream energy sector.
Virgin PET market
India’s virgin PET bottle-grade market weakened in spot and import channels during the assessment week, despite domestic producers maintaining the basic price at INR 133.10/kg. Import offers declined to around INR 122.50/kg ex-Mundra and INR 123.50/kg ex-Nhava Sheva, while domestic spot prices were assessed at INR 124/kg ex-Mumbai and INR 125.50/kg ex-Delhi.
The lower market offers reflected the correction in crude and naphtha and a narrowing gap between domestic and imported material. However, producers continued to maintain the listed basic price, supported by steady end-user demand and tighter import availability. On 6 August, RIL and IVL Dhunseri announced a INR 2/kg early-bird discount on PET until 15 August, along with price protection until the next revision.
The discount prompted a marginal improvement in procurement as converters sought to secure material under the price-protection mechanism. However, buying remained predominantly need-based, with market participants continuing to monitor crude and feedstock movements.
A western India trader said “participants had increased procurement marginally following the discount and price protection, although demand remained largely immediate-need based. The trader added that spot availability was comfortable and the gap between domestic and imported offers had narrowed”.
A converter source said “buying remained cautious as volatile crude prices and uncertainty over the direction of virgin PET offers limited appetite for inventory accumulation”. Meanwhile, a producer source indicated that “sustained feedstock costs and steady demand continued to provide support to domestic PET pricing despite softer crude and import offers”.
Recycled PET market
India’s recycled PET market remained comparatively firm during the week, although individual grades showed mixed movement. Delhi NCR PET bottle bale prices increased to INR 52/kg from INR 50/kg in the previous week, while rPET flakes below 30 ppm declined marginally to INR 83/kg. Flakes below 100 ppm remained stable at INR 76/kg, while food-grade pellets softened slightly to INR 114/kg.
Trading activity remained selective as buyers monitored the correction in virgin PET prices. However, tight availability of fresh PET bottle scrap continued to provide a floor to bale prices and limit downside across the recycled value chain.
A major sourcing company executive said the company was actively procuring from both certified and regular recyclers. Deals for certified <30 ppm flakes were heard at around INR 86/kg, equivalent to approximately USD 920/MT FOB Nhava Sheva, while food-grade pellets were around INR 114.50/kg. Regular recycler procurement was reported at INR 82-83/kg for <30 ppm flakes and around INR 111-113/kg for food-grade pellets. The source added “that both export and domestic demand remained stable and expected the market to remain firm in the near term amid raw-material shortages”.
However, a buyer said “rPET demand had weakened and was expected to remain subdued until next month, keeping prices under pressure”. A recycler reported completing a 300-tonne PET bottle bale deal at INR 50.50/kg against a prevailing market level of around INR 51/kg. The recycler said supplies from South India were available, while North India collection had improved compared with earlier levels.
The recycled market remained constrained by seasonal collection patterns. Although converter demand was described as relatively low and recyclers were carrying comfortable inventories, reduced availability of fresh PET scrap bales has tightened the raw-material market. This has provided support to bottle bale prices even as downstream rPET demand remains subdued.
Outlook
Virgin PET prices are likely to remain under pressure over the next 1–2 weeks, with spot offers potentially moving toward INR 120-125/kg if Brent remains below USD 85/bbl and naphtha stays around USD 700-750/MT. However, domestic producers are likely to resist a sharp correction as feedstock costs remain elevated and the INR 2/kg price-protection scheme is supporting near-term buying.
The key downside risk is the INR 8-10/kg gap between domestic producer prices and current spot/import offers. If this spread persists, converters are likely to continue favouring imports and spot purchases rather than building inventories. Conversely, any renewed disruption around Hormuz could quickly push crude back above USD 85-90/bbl, limiting further PET price declines.
rPET is expected to outperform virgin PET in the near term. Bottle bale prices could remain around INR 50-53/kg, supported by seasonal collection constraints, while food-grade pellets are likely to trade around INR 112-116/kg as demand remains subdued. The sharper downside risk for rPET would emerge only if virgin PET prices fall further and fresh bottle-bale availability improves.
Overall, virgin PET has a softer bias, while rPET is likely to remain range-bound, with scrap availability becoming the key price driver. This divergence could persist through the next few weeks as lower global feedstock costs pressure virgin PET faster than the relatively tight domestic recycled-feedstock market.
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