India PVC Market Remains Bullish With Some Notes In Future
- Producer reveals the latest offer to be compatible with the import market
- Import market waiting for primary offers from Taiwan
- Outlook shows an adverse picture
India PVC market is on fire this week as a market player riding trend from last week with PVC prices showing indications of reaching their highest level for time to come. Leading Indian PVC producer announced the price of its cargoes at INR70,500/ton ($935/ton) on cash, EXW Mumbai basis and excluding 18% GST. This price represents an increase of INR2,000/ton ($26/ton) from last week's offers. From the import market, a South Korean producer decided to offer their cargoes at $850/ton which was perceived by the trader as unworkable, but at the same time is considered a sign for the upcoming offers from but at the same time is considered a sign for the upcoming main offer from a leading Taiwanese PVC producer. A Japanese PVC producer's offer stands at $830/ton although market sources quoted by SSESSMENTS.COM told that the producer does not have much allocation. All import offers are on LC at sight, CIF India Main Port basis.
Domestic demand is still going strong this week with local producers reported that their cargoes are already fully booked for June delivery. SSESSMENTS.COM noted that the most significant order came from the agriculture sector. Talking about the production side, one of the piping converters reported that their production is running at full capacity to support demand. Even so, the extended lockdown that occurs around Mumbai and Gujarat leaves some manufacturers still experiencing shortage of workforce. Extended lockdown also affects transportation which impacted PVC supply chains, creating tightening conditions which are also driven by import volumes that are smaller than May according to a statement from one of the producers.
Different pictures then emerge when talking about outlook. Some producers and traders pointed out demand will grind out until early July, per scheduled monsoon season. With tight supply, coupled with low inventory and limited imported cargoes; customers seem willing to accept the high prices now. However, other traders worry that upcoming import offers will be perceived too high by customers and do not stimulate deals. From the side of the converters, they pointed out to SSESSMENTS.COM that PVC price stabilization could occur shortly as pipe demand had begun to slow down amid the advanced monsoon season in some parts of India.
