Indian Buyers Shy Away From Procurement For Import PVC Cargoes Amid Traditional Low Season
- Leading Indian petrochemical producer adjusted local offers with effect from July 16
- Demand in the country is dull
- Players voiced out different outlook
SSESSMENTS.COM was told that Indian buyers shy away from the procurement for import PVC cargoes amid the traditional low season. In the previous week, the leading Indian petrochemical producer adjusted the local offers for ethylene-based PVC by INR1,500/ton ($20/ton) higher with effect from July 16. Following the producer’s movement, some traders also increased the local offers for ethylene-based PVC by INR1,000/ton ($13/ton) over the week. Sources revealed that deals for local cargoes were recorded at INR74,500/ton ($997/ton) on cash, FD Bengaluru basis, and excluding 18% GST. For localized cargoes, upward adjustments of between INR1,000-2,000/ton ($13-20/ton) from last week were also recorded for localized Taiwanese and Thai PVC cargoes. Yet, some traders decided to keep the offers for localized Taiwanese cargoes stable on a weekly comparison. In the import market, the offers for import ethylene-based PVC cargoes of Saudi origin stood at $850/ton on TT, CIF India Main Port basis. However, sources did not mention the detailed price comparison. Pertaining to the import Thai ethylene-based PVC offers announced last week at $890/ton, sources stated that the offers were deemed unattractive, hence, there were no deals concluded so far.
According to market sources contacted by SSESSMENTS.COM, there is no improvement recorded in terms of demand as buying sentiment is affected by the monsoon. From the agricultural sector, the demand for finished products is sluggish due to the monsoon. While for rigid pipes, the overall demand has been decreasing around 50% of the normal demand before the monsoon. Although compared to the same period last year, some sources stated that the demand is improving. Sources also mentioned that the buying sentiment is supported by the relatively limited supply in the market. However, most buyers are uninterested in making purchases for import cargoes as it would be risky, especially on firm prices.
Looking ahead, market sources expressed an opinion to SSESSMENTS.COM that local PVC prices will most likely be stable or slightly softer in the near term following movement in demand due to monsoon. However, some sources predict that the local PVC prices will still have room to increase further by around INR1,000/ton ($13/ton) next week considering the limited supply in the market. Likewise, the possibility for September shipment offers to move lower is also thin taking into account the strong VCM prices. Nevertheless, players are unsure of the workability of the offers.
