Competitive Chinese offers eclipse PVC rally in India

In India, the sentiment in the import PVC market has stayed strong given the pre-monsoon demand and limited supply. Nonetheless, the competitively-priced acetylene-based PVC offers from China have heated up the competition among Asian suppliers, casting a shadow upon the bullishness.

The major Taiwanese producer’s April offers also came closer to the high end of market expectations ; up by $80/ton on the month to stand at $1640/ton CFR India cash basis.

Aggressive PVC offers from China stir competition

The major producer’s hike decision is traditionally expected to be followed by the regional suppliers. But this month, the presence of Chinese acetylene-based PVC prices has pushed them to be cautious on their pricing.

Chinese suppliers’ aggressive stance across the export outlets in 2021 due to weak demand and ample supply at home is reinforced by the expiration of anti-dumping duty for the origin in February in India.

A Chinese trader said, “The export volume to India has increased significantly following the expiration of the anti-dumping duty on Chinese origin offers in February. Hence, Chinese suppliers are not under any sales pressure despite weak demand in the domestic market.”

Japanese suppliers limit hike amounts to compete with Chinese origin offers

A regional trader reported offering duty-free Japanese origin PVC at $1750-1800/ton CIF India cash. This means that a dutiable cargo may be priced at about $1590/ton CIF. Japanese imports of PVC into India have zero customs duty, while PVC of other origins is levied 10%.

He commented, “There were reports of many competitively-priced Chinese acetylene-based PVC offers into India at $1550/ton CFR India basis, challenging Taiwanese, Japanese, and Korean suppliers offering higher-priced ethylene-based PVC cargoes, such as the Taiwanese major’s April offer at $1640/ton CFR India.”

Heavy resistance on buyers’ side

The presence of aggressive Chinese-origin acetylene-based PVC prices has also resulted in growing resistance in the midst of the pre-monsoon season.

A source from a Japanese producer said “Although the latest April offers were within market expectations, there is rising buyer resistance against these hikes, particularly in India. There are offers for Chinese acetylene-based PVC in India and they are more competitive. We think demand is still robust, but there is a lot of competition from Chinese-origin PVC.”

The Asian trader also noted, “Buyers are likely to continue resisting higher-priced offers into India so long as Chinese suppliers remain aggressive.”