Booming PVC Business In India After Lockdown Relaxation
- Offers for local PVC cargoes are more competitive compared to open market price
- Demand keeping up as industry activities starting to recover
- Bright outlook before monsoon kicks in
India PVC market is booming as businesses are back on track after lockdown. For this week, the leading Indian PVC producer informed SSESSMENTS.COM that ethylene-based PVC offers are at INR68,500/ton ($910/ton). According to the producer, their offers are lower by INR3,000-4,000/ton ($39-53/ton) compared to open market price. From one of the trader’s end, offers for localized South Korean, Russia and Taiwanese PVC cargoes are between INR75,000-76,000/ton ($997-1,010/ton). The trader also reported that PVC offers across India were up by INR2,000/ton ($26/ton) by the end of last week. All local/localized offers on cash, EXW basis and excluding 18% GST. Fresh import offers still did not appear at the time the article was published. Despite demand for PVC in the local market is making an improvement, the leading Indian PVC producer is still exporting some volume to China at $700/ton on CFR China Main Port basis.
A producer source told SSESSMENTS.COM that their customers placed orders for PVC cargoes this time because their inventory was already low after the activity curtailed when the full lockdown was imposed between March and May. Conjugate by price has bottomed, customers found confidence to build their inventory. While demand has not been entirely back to normal, the consumption rate of PVC cargoes has reached 60-70% from the average. With extended lockdown in several locations such as Mumbai curtailed workers movement, full production rate still requires time to be achieved according to the producer but the business as a whole went on as usual. With not much PVC materials available on the ground coupled with the rapid increase in purchases; supply is expected to experience some tightness this week.
Taking into account the maintenance at some PVC plants in Asia, the price in the Indian market should remain firm onward with room for further increase. Demand for PVC in the Southern part of India can sustain until the end of month, while for Northern part slated to last until the first half of July as quoted by one of the local PVC producers. Even though outlook looks good, market players contacted by SSESSMENTS.COM said that the cyclone and haste rainy season can affect existing momentum.
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