India’s local PVC market falls to levels during COVID period in 2020
Local PVC K67 markets, assessed at INR70,500-74,000/ton ($848-890/ton) FD India last week, are trading — as plotted below by the ChemOrbis Price Wizard — at a nearly four-year low in dollar terms, or at the lowest since the second week of May 2020. In other words, prices have sunk to levels noted slightly before the first peak COVID period in India that began in August 2020. Nationwide COVID lockdowns in India started on March 25, 2020.
“This is actually the major reason for the current market downturn,” a Mumbai-based trader said. “We don’t see the emergence of any support to the market in the near term as post-monsoon buying seems to have largely been forgotten by players. There’s ample availability in the local markets and buyers currently seem to be perched on the low end of the local pricing, or are waiting for further price cuts,” he added.
Indian major applies three consecutive price cuts in two weeks
In fact, a major Indian producer notified price cuts three times in the last two weeks totalling INR11,000/ton ($132/ton), or about 13% over the short period. And, shortly after the latest pricing cut of INR4000/ton ($48/ton) on Wednesday, the producer also extended volume-based discounts. Accordingly, a buyer lifting 7% to less than 8.33% of its annualised quantity will get a discount of INR1000/ton ($12/ton), while one lifting 8.33% or higher will get an INR2000/ton discount.
“These are quite substantial and point to tremendous pressure on the producer. It’d waited for seven weeks before it first reduced prices early last week. But that led to further price cuts and more incentives,” another local trader said. “We expect these initiatives to lead to local open market prices also falling further and putting pressure on the import prices in the weeks ahead,” he added.
Traders also said the producer could have anticipated a steep fall in a major Taiwanese producer’s benchmark import levels to Asian buyers for next month’s allocation. Market participants are currently expecting the Taiwanese major to reduce its November import prices to Asian buyers by about $100/ton or more when notifications are made this week.
Import K67 at almost one-year low
As for the import markets, PVC K67 prices have declined to the low-$700s/ton at the low end last week, with deals for US shipments reported at $730/ton CIF India and for Chinese shipments at as low as $740/ton CIF India last week.
ChemOrbis Price Index data reveal that the weekly average of PVC K67 prices on CIF India basis are currently at their lowest level since November 2022.
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