Asian PVC players evaluate the implementation of GST in India
India’s PVC market has already been under pressure from several bearish factors including the approaching monsoon season, sluggish demand as well as lower spot ethylene prices in Asia, which retreated by around $180/ton from early May levels. The upcoming implementation of GST and its uncertainty are also contributing the weakness in the market as players are mostly sidelined.
PVC players’ opinions towards GST vary. Some of them believe that the tax will impact the market negatively as it will weaken the buying interest further while other players expect it to support the economic conditions.
A source from a Thai producer opined, “We think GST will hamper buying interest of converters in India. Therefore, we expect PVC prices to remain stable next month.”
A trader in India noted, “Following the Taiwanese major’s rollover decision for June, Japanese offers also followed suit. We heard that the major producer was able to sell less than its allocation. We think the market will remain bearish in the months ahead in the face of the monsoon season along with the implementation of GST.”
A source from an Indian producer also commented, “Buying sentiment in India is weak due to the upcoming GST application.” However, he thinks that although it will take some time to adjust, GST will contribute to GDP by 1% in the long term.
A converter in India also noted, “We expect to see slow demand in June as companies are minimizing their inventories due to GST. However, we think this enforcement would be beneficial for India’s economy in the long term despite some difficulties during the adjustment process.”
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