India's LAB prices dip amid rising imports & softening feedstock costs
India's surfactant sector still relies heavily on linear alkyl benzoene (LAB), with local demand expected to reach over 720 KTA in fiscal 2024 (FY24) and 767 KTA in fiscal 2025 (FY25) with a growth rate of CAGR 6.53 per cent. Due in large part to India's expanding presence in the global soap and detergent industry, the market has demonstrated resilience in the face of global challenges.
India's LAB demand is rising, but prices fell from ₹132/kg (~$1.55/kg) in Jan to ₹129/kg (~$1.51/kg) in May 2025 due to weak upstream costs, rising regional supply, and cautious buyer sentiment. Imports are expected to ease with IOCL's capacity ramp-up. Prices may drop ₹3â€'7/kg (~$0.04â€'$0.08/kg) from Junâ€'Aug 2025 amid stable but soft LABSA demand and higher feedstock availability.
In fiscal 2023 (FY23), Indian Oil Corporation Ltd (IOCL) increased its LAB production capacity from 120 KTA to 162 KTA in order to meet the growing demand. However, India's LAB production fell to 400 KTA in FY23 from 457 KTA the year before as a result of planned shutdowns and de-bottlenecking efforts. With the exception of Reliance Industries Ltd's 60 KTA halted plant, the domestic operating rate was 93 per cent.
This shortfall in production was offset by a rise in imports, which peaked at 337 KTA in FY23. With IOCL's capacity enhancement now complete, imports are expected to moderate, reflected in a projected 281 KTA and 310 KTA import level for FY25 and fiscal 2026 (FY26).
Current Market Drivers (as of April–May 2025):
From January to April 2025, Indian Linear Alkyl Benzene (LAB) prices showed a moderating trend. Starting the year at around ₹132 per kg in Jan 2025. However, by April 2025, a notable downward correction occurred.
The decline continued into May 2025 around ₹129 per kg. This sustained reduction aligns with broader market dynamics, including weaker upstream costs, increased regional supply post-turnarounds, and softening buyer sentiment. Despite earlier resistance from suppliers, the growing supply and downward pressure on feedstock prices have begun to weigh on LAB prices in the Indian market.
Downward Pressure on Prices: Falling Naphtha Prices: A major feedstock for LAB production, naphtha prices have declined significantly due to weak crude markets and improved refining margins.
Negative Market Sentiment: Buyers are cautious, driven by sluggish demand recovery and global economic uncertainties.
Plant Restarts in Asia: Key LAB production facilities in Asia have resumed operations post-maintenance, boosting regional supply.
Expected LAB Price Trend in India (June–August 2025)
Forecast:
Indian Linear Alkyl Benzene (LAB) prices are expected to remain under pressure or decline modestly in the next quarter (June to August 2025), Overall, a gradual decline of ₹3–7/kg is expected over the next quarter.
Reasons for the Expected Trend:
1. Weak Upstream Cost Support: Benzene and naphtha prices are on a declining trajectory
Lower feedstock prices reduce cost push on LAB, encouraging sellers to lower offers.
2. Rising Regional Supply: Post-turnaround plant restarts in China and South Korea have increased LAB availability in the Asian market.
Greater availability of feedstock normal paraffins may ease production constraints, further softening prices.
3. Buyer Sentiment & Inventory: Indian buyers remain cautious and price-sensitive, with ample inventory coverage.
Expectation of lower offers is delaying procurement, reinforcing downward price pressure.
4. Stable but Soft Downstream LAS Demand: While the LABSA market is steady.
Buyers are continuing to seek price reductions, aligning with upstream softness.
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