2013: A challenging year for the Indian Petrochemicals Industry

Despite uncertainties, 2013 did see a pick up in global economic growth, with outlook for 2014 pointing to further improvement in growth from the advanced economies. World economic growth is projected to increase at around 2.7-2.9% in 2013. The US$1.8 trillion Indian economy suffered its worst slowdown  in over a decade with growth below 5% for four straight quarters. Persistent inflation and low investments due to policy inaction, coupled with external factors like the speculation of quantitative easing by the US Federal Reserve dampened growth. The main challenge facing the Indian petrochemicals industry will be the volatility of the rupee. The currency's recent collapse poses an upside risk to future cost rises, particularly when combined with any crude price rises, and would undermine operating margins. In 2013, while the rupee was weakening and the cost of crude imports rose in local currency terms, polymer prices did not move significantly. Click here to read more

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