Morning Briefing - 19 August 2026

India’s LPG production push tests petchem feedstock balance

India has ordered 21 refineries and upstream companies to raise LPG production capacity to a combined 63,810 tons/day, with Reliance Industries receiving the largest individual target at 18,000 tons/day. The directive, issued on 13 August, strengthens the country’s supply buffer given its heavy reliance on imports, which accounted for around 64% of LPG consumption in fiscal 2025-2026.

The implications for the petrochemical sector, however, remain uncertain and will depend largely on how refiners achieve the mandated output. If the additional LPG comes from higher recovery or incremental production, existing petrochemical feedstock availability may remain largely unaffected.

Market participants are nevertheless watching for any diversion of C3/C4 streams away from petrochemical production. Should refiners prioritise LPG output at the expense of feedstock allocation, downstream producers could face tighter availability and higher costs, potentially weighing on operating rates. For now, the mandate represents a potential feedstock risk rather than an immediate disruption.

Bullish forces lift Vietnam LLDPE film — demand refuses to follow

Vietnam’s domestic LLDPE film market rose sharply on the second trading day of the week as sellers responded to a combination of bullish external cues, including renewed US-Iran tensions, continued strength in the Chinese market and a sharp increase in import offers from major overseas suppliers.

The rally, however, struggled to translate into stronger trade. While buyer inquiries picked up, concluded transactions remained limited as converters questioned the sustainability of the uptrend amid lingering geopolitical uncertainty.

Expectations of softer downstream demand during the Ghost Month further reinforced the cautious stance, prompting buyers to resist chasing higher prices despite rising replacement costs. As a result, the market remains caught between mounting cost pressure and subdued demand support.