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Impending Indian duties, holidays cloud Asian PVC outlook

by Shibu Itty Kuttickal - sikuttickal@chemorbis.com
  • 06/09/2022 (05:54)
Expectations of safeguard duties on Chinese PVC in India and the holidays ahead in Asia for the mid-Autumn festival may prompt a major Taiwanese producer to put off release of its October pricing by a week or two.For now, import markets in both India and other Asian markets are marked by a persistently slow demand that points to further price cuts ahead.

Indian players expect further price cuts but not this week

Indian traders expect the Taiwanese producer to reduce prices by $50-60/ton from its September pricing at $1010/ton CIF India. “Most traders expect the producer’s October pricing at $950-960/ton CIF India, although interest is mostly at the $900/ton mark or lower,” said a trader in India. “But we don’t expect the producer to announce prices this week as a clear market direction is likely only after the mid-Autumn festival,” he added.

Meanwhile, the situation has been made murkier by expectation of an announcement by the government of safeguard duties on Chinese PVC. India’s commerce ministry late last week said it may initiate a probe against large-scale import of inferior-quality carbide-based PVC from China. This came after the ministry received a representation from two domestic producers pointing to an unprecedented rise in carbide-based PVC imports into India.

“We expect players to put off buying decisions as there is expectation of an announcement any time from the government on a safeguard duty ahead of the actual imposition of anti-dumping duties on Chinese PVC,” another Indian trader added. “Nobody wants to be burdened by a shipment that may entail duties later,” he added.

The Indian producers have said that if the surge in Chinese imports was not checked, it could lead to a piling up of inventories at producer warehouses. And putting a further spin, the previous week also saw allegations of Chinese PVC containing harmful carcinogens.

Prices keep plunging

Import prices in both India and China are currently at two-year lows as the markets have been depressed by persistently weak demand. Indian import PVC K67 prices of overall origins were assessed $10-20/ton lower from last week at $920-1000/ton CIF, cash basis.

The low end of the assessment reflected a return of Chinese ethylene-based shipments after a hiatus of slightly more than a month. Traders said the current week has so far not seen offers from China although there was talk of US shipments being offered below the $900/ton mark.

In China, the overall range for import PVC K67 offers was assessed flat from last week at $900-940/ton CIF China, cash. Within the range, offers for Northeast Asia origins were standing at $900-930/ton with the same terms while US origin offers were assessed stable at $910-930/ton CIF. US prices fell last week by $20-30/ton to $770-780/ton FAS Houston. Traders in both China and India reported FAS prices stable during the current week.

Market may not see major changes ahead of holidays

Chinese and Southeast Asian players also did not expect major changes in the pricing ahead of the mid-Autumn festival late this week and were tight-lipped on any expectation for the Taiwanese producer’s October pricing.

“The demand stays weak but it’s unlikely for the market to see a great deal of price changes ahead of the mid-Autumn festival holidays. We’re already seeing market players taking extended leaves ahead of the holidays. Nobody would want to commit to sell or to buy shipments in such a situation,” a major player in China said.

The mid-autumn festival starts on September 10 and lasts for three to four days in China, Malaysia, Singapore, Indonesia and the Philippines.
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