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India arbitrage windows for PVC open from Türkiye, Europe

by Shibu Itty Kuttickal - sikuttickal@chemorbis.com
  • 04/06/2024 (13:32)
Higher import prices in India as a result of rising freight rates from China have led to market talk of unusual arbitrage windows opening from Europe and Türkiye , where demand remains dramatically dull. These opportunities are said to have opened as import prices have jumped by slightly more than 14% since the first week of May.

The ChemOrbis Price Wizard shows import price assessment ranges in India, that hovered around the $775/ton midpoint in early May, have risen to current levels around the $885/ton midpoint.

PVC K67 – India

Prices surge above $900/ton threshold

In the previous week, prices rose above the $900/ton threshold, with a shipment from the US changing hands through a trader at $910/ton CIF India mark, and Chinese prices reported in a $870-920/ton CIF range.

This has resulted in market talk that the current Indian prices are conducive to the opening up of new arbitrage opportunities. In fact, traders reported that a shipment from a European producer changed hands at a CIF price of slightly less than $900/ton. And, they also said a Turkish shipment was offered to India at $860-870/ton CIF.

Taiwanese prices for June ‘an old story’

A major Taiwanese producer on May 14 had offered its June allotments $30/ton higher at $830/ton CIF India. “But that’s an old story in the current market,” a trader said. “We see very few offers below $900/ton in fact and if there are any, they are snapped up in the current market,” he added.

There’s also a sense that prices could surge once the current government returns to power after votes are counted on June 4. The government is expected to push for infrastructure development projects which could boost the PVC markets.

Freight rates, infra spending only bullish factors

While import prices continued to rally, players said the sentiment was upbeat only because of freight rates rising as well as expectations of an infrastructure spending surge likely to be initiated after elections results are released in early June and a new government is installed.

“We think only the freight increase and bullish expectations for the future are pushing the prices up. Otherwise, we don’t see a real demand strength, nor do we see any paucity of PVC in the market. The monsoon may in fact rein in any runaway buying activity,” an Indian trader said.
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