- Demand for PVC in India improved week by week during May
- Since May 18, manufacturers in Mumbai and Delhi were allowed to run at maximum 50% capacity
- Market players opined the possibility for further upward adjustments on local PVC prices is high
On 1 May, the Ministry of Home Affairs (MHA) and the Government of India further extended the lockdown period to May 17, with some relaxations. Regions were categorized into three zones: red, orange, and green. Market activities resumed, but local ethylene-based PVC prices were corrected down by INR3,500/ton ($46/ton). Adding to the downward adjustments, a local PVC producer also provided discounts of INR2,000/ton ($26/ton) for minimum purchases of 500 tons to attract buyers. In the second week, SSESSMENTS.COM was informed that local offers increased by INR1,000/ton ($13/ton) from levels a week earlier due to better buying sentiment. Although India extended lockdown that was supposed to be lifted on May 17 in areas labelled as red zones to the end of the month, the uptrend in local PVC prices was still seen in the third week as additional relaxation on the rules was applied.
In this particular week or on May 18, most local producers increased offers by INR2,000/ton ($26/ton) from the previous offers following the increase in import offers. Meanwhile, market players informed that a local producer applied an upward adjustment of INR6,000/ton ($80/ton) from the last offers, however, the producer claimed the statement as untrue. On May 21, the leading Indian PVC producer increased offers by another INR2,000/ton ($26/ton), hence, the total increments made by the producer in the third week of May was INR4,000/ton ($53/ton). In the last week of the month, local offers in the open market were recorded at INR2,000/ton ($26/ton) higher than the previous week. For localized ethylene-based PVC from Taiwan, South Korea and Russia, offers also went up between INR1,000-1,500/ton ($13-20/ton) compared to the same period. On May 28, the leading Indian PVC producer raised offers by INR2,000/ton ($26/ton). Following the step, a local producer informed SSESSMENTS.COM on May 29 that the company also increased offers by the same amount.
From the import market, cargoes of Russia origin were offered at $620/ton on LC at sight, CIF India main port basis while offers from Ukraine stood at $650/ton on LC 90 days and the same delivery term in the week commencing May 4. However, market talks have it that deals for cargoes of the two origins were below $600/ton-level. On May 19, June shipment offers from the leading Taiwanese PVC producer surfaced at $740/ton on LC at sight, CIF Nhava Sheva port before volume discount. On the same day, a Japanese PVC producer announced that offers to India stood at $760/ton with the same payment and delivery term. No monthly comparison for both origins as the producers did not have offers for May shipment to the country due to the lockdown, SSESSMENTS.COM noted.
Demand for PVC in India improved week by week during May. More and more manufacturers resume operation after the government loosened lockdown rules. In the first two weeks of the month, the production rate of the converters in the orange and green zone increased up to 70-80% for the small ones and 50-70% for the big ones. Meanwhile, manufacturers in the red zones like Mumbai and Delhi remained shut at this particular time, but the manufacturers made procurements to secure stock since prices were predicted to move higher. In the week commencing May 18, manufacturers in Mumbai and Delhi were allowed to run at maximum 50% of the normal production rate. By the end of the month, a global trading house commented to SSESSMENTS.COM that demand for PVC in India had increased to 50-60% of the normal demand in the country. For the end product, robust demand was reported for PVC pipes supported by the agriculture sector. On the supply side, the availability of materials in the market was limited due to fewer import cargoes entering the country coupled with good demand.
Entering June, the majority of market players in India believe that the possibility for further upward adjustments on local PVC prices is high. A local producer opined to SSESSMENTS.COM that there is a room for further upward adjustment between INR2,000-3,000/ton ($26-40/ton). Meanwhile, the healthy demand is predicted to last until the monsoon starts in mid-June or early July.
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