Supply Issue Bolsters Local PVC Prices In India, Demand Expected To Follow Traditional Patterns
- The leading Taiwanese PVC producer has announced August shipment offers
- Monsoon season continues to weigh on PVC demand in India
- Local offers expected to be stable or even firmer in the near term
As informed to SSESSMENTS.COM, supply issue bolsters local PVC prices in India, while demand is expected to follow traditional patterns. In the domestic market, a pipe manufacturer received stable PVC offers from local producers and purchased some volumes at the same level to the initial offers at INR73,000/ton ($973/ton) on cash, FD Bengaluru basis and excluding 18% GST. While from the traders’ end, PVC offers captured stable to firmer this week following the relatively limited supply in the market. Offers for localized Russian, South Korean, Taiwanese and Ukraine PVC cargoes via Delhi-based traders were stable to slightly firmer by INR1,000/ton ($13/ton). While in Mumbai and Chennai, traders adjusted up localized Russian, South Korean, and Taiwanese PVC cargoes between INR500-2,000/ton ($7-27/ton). All on the weekly comparison. In the import market, a trader voiced out buy ideas for PVC cargoes of Indonesia origin at $830/ton on LC at sight, CIF Nhava Sheva Port, $20/ton lower compared to last Friday’s offer level. As for Taiwanese origin, the leading Taiwanese PVC producer has announced August shipment offers, available at $860/ton on the same payment and delivery terms, $20/ton higher compared to July shipment. However, for buyers who got discounted prices last month, the current offers are $30/ton higher. This month, the producer does not provide volume discounts citing limited allocation. According to market sources, the producer has sold out all allocation as the volume is only 50% from normal.
Demand-wise, monsoon season continues to weigh on PVC demand in India. Buyers keep purchasing on a need basis. SSESSMENTS.COM noted that converters in Chennai are currently running at 60-70% from normal capacity. However, market players stated that PVC demand from the pipe sector increased around 20% from a fortnight ago as converters started to build up inventory after the factories were shut during the lockdown. On the supply side, overall PVC supply in India is limited. Still, currently, no issue on getting materials due to the slow demand.
Looking ahead, market players opined that local PVC offers will be stable or even firmer in the near term on the back of limited supply. As for demand, PVC demand in India expected to follow traditional patterns and remain slow until September due to high rain intensity, SSESSMENTS.COM was told.
