Leading Indian PVC producer informed SSESSMENTS.COM that PVC demand in the country remains healthy amid worsening coronavirus situation. The producer revealed that their offers maintained stable from last week at INR73,500/ton ($963/ton) on cash, EXW Mumbai basis and excluding 18% GST, which is basically equivalent to INR71,200/ton ($939/ton) after cash and quantity discounts. As such, there is good acceptance from customers at this current level. The producer added further that most of the customers placed big orders as their inventory was very low.
Speaking of the demand, the producer told SSESSMENTS.COM demand might be starting to weaken in west India because monsoon comes earlier in that area. However, the east part is not affected by the monsoon yet so overall demand can still be considered as good. From sectors view, the demand is supported by agricultural and medical sectors, while the construction sector is still not yet picking up after shortage of labor while the government not prioritizing this sector amid coronavirus pandemic. In the production sector, factories are running at 95% rate now. Additionally, the producer also uses their PVC resins to produce PPE kits to fulfil country’s demand. SSESSMENTS.COM noted that even though the number of new coronavirus cases is surging in India lately, especially in Chennai, Delhi, and Mumbai; but the affected areas are now being divided into mini containment zones so it does not affect manufacturing activities. Talking about supply, the producer reported the logistics sector is not running smoothly because of workforce shortages. The producer also told that they are still mostly focusing on the delivery at the moment as they are sold out for June delivery, so whatever is coming out it'll be delivered to customers. Thus, there is no inventory at the moment.
In terms of pricing outlook, the producer shared with SSESSMENTS.COM that the local PVC prices would maintain stable for another one or two months. After that, the price may start to come down because of slow demand amid monsoon season.
