Lockdown relaxation in India gives a fresh restart for the PVC market after slumping last month. A source from the leading Indian PVC producer disclosed to SSESSMENTS.COM that the company has received a lot of inquiries as compared to the previous month. The producer said that demand has improved by 2.5 times from April, currently around 50% from normal sales, as more factories resumed operation. Since last week, factories have started applying for an operational permit and this week more permits are applied. Some downstream factories have started moving out the piling up inventories in the warehouse. As such, liquidity might improve gradually. Some customers have also started to place orders as they think the current price level is quite low.
The producer said that the overall factories operating rate in India is around 30-40% at the moment, and the factories currently running are the ones in the orange and green zone, while those in the red zone are expected to resume operation once the Coronavirus situation improves. In the production sector, the producer’s PVC plants in Vadodara, Hazira, and Dahej are still running at 90-95% capacity. Other local PVC plants have also started to run, but for Finolex, no clarity from the producer about when they will resume operation. For Chemplast Sanmar, the producer heard that their jumbo bag is not available; only small bag packagings are available at the moment.
In terms of outlook, the producer thinks there is not much room for PVC prices to come down further, as if it drops, it will only be as low as $20/ton maximum. As more and more businesses reopen as of recent, India PVC demand and pricing outlook should improve onward, the producer opined.
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