PTA: India implements phased zero tariffs, benefiting PTA exports

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Analyst An Guang from Zhuochuang Information

[Introduction] To alleviate the global supply chain disruptions caused by Middle Eastern geopolitical conflicts, from April 2 to June 30, 2026, India reduced import tariffs on certain chemicals to zero, including PTA. India is a major export trading partner of China for PTA, and it is estimated that PTA exports will increase.

India Temporarily Eliminates Tariffs on Certain Imported Chemicals

From April 2 to June 30, 2026, India reduced import tariffs on some chemicals to zero. Due to disruptions in oil shipping caused by Middle Eastern conflicts, Asian petrochemical companies have reduced production. To ensure stable domestic supply and manufacturing costs, India proactively implemented zero tariffs on imports to expand imports and stabilize its supply chain.

India is a major export trading partner of China for PTA. The BIS certification issued by the Bureau of Indian Standards (BIS) for Chinese PTA companies expired in June 2023. As a result, China’s PTA exports to India sharply declined. India lifted the BIS requirement for Chinese PTA companies in November 2025, and from that point, China’s PTA exports to India rebounded. From November 2025 to February 2026, China exported 330.4k tons of PTA to India, accounting for 25% of China’s total PTA exports. In January-February 2026, China exported 128k tons of PTA to India, representing 21% of total exports.

Forecast: China’s PTA exports will increase but with limited growth

Positive factors: India’s temporary zero tariffs reduce import costs for PTA

Currently, India’s tariffs on Chinese PTA are about 3%. The temporary zero tariffs lower India’s import costs for PTA and enhance China’s PTA export competitiveness. In March, the average monthly processing fee for PTA was 205 yuan/ton, down 50% from February. At 205 yuan/ton, it cannot cover the material costs of PTA. Many foreign PTA plants are older and smaller, so low processing fees are negative for outdated foreign PTA facilities, while domestic PTA plants are mostly large and new, giving them a cost advantage that benefits exports.

Positive factors: Delays in new Indian PTA capacity production maintain demand

There is no clear date for the commissioning of new PTA capacity in India. The market previously heard that GAIL might start production in April, based on a meeting in India on February 20. However, no official announcement has been made. With escalating Middle Eastern conflicts, disrupted oil logistics, widespread production cuts in Asian petrochemical companies, reduced PX supply, and PTA production losses, it is estimated that the new Indian PTA capacity will be delayed. Domestic PTA supply in India has not increased as expected, which is favorable for Chinese PTA exports.

Negative factors: Concentrated maintenance of Chinese PTA plants will reduce output

In Q2 2026, China plans to conduct maintenance on several PTA plants, leading to a decline in domestic PTA production. This will likely cause PTA processing fees to rise, potentially limiting China’s PTA export volume. Some integrated plants are undergoing major repairs, and in March, PTA processing fees were low amid concerns that geopolitical conflicts in Q2 could cause PX shortages. Between April and June, 19.5 million tons of PTA capacity are scheduled for maintenance, with an additional 5 million tons of PTA plants potentially affected by PX supply issues. There are also risks of plant shutdowns. Besides, multiple PX plants in Asia are scheduled for maintenance in April-May, and the Strait of Hormuz issues may lead to refinery cutbacks, further reducing PX and PTA production. It is estimated that April PTA output will fall to around 6.03 million tons, down 670k tons from March. Unplanned shutdowns may increase in May and June, with monthly PTA output estimated between 6.10 and 6.30 million tons. In Q2, PTA is expected to shift from inventory accumulation to destocking, easing supply pressures but possibly limiting export growth.

Impact: Increased exports support PTA destocking

Rising PTA exports will help reduce inventories, boost market sentiment, and support a rise in spot basis spreads. Under destocking expectations, spot offers at major ports in late April increased by 30 yuan/ton within two trading days. If unplanned plant shutdowns increase and exports surpass market expectations, spot basis spreads could continue to rise.

In summary, India’s temporary zero tariffs and the lack of a clear timetable for new Indian PTA capacity are positive for China’s PTA exports. It is estimated that monthly PTA exports will rebound to 400,000–430k tons, aiding destocking in Q2. Spot basis spreads are expected to rise, reinforcing the near-strong, far-weak market pattern for PTA.