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Indian PVC market remains on a bullish track

  • 23/03/2016 (02:45)
The Indian PVC market has been firming up since early February with players holding bullish expectations for the near term. Following the emergence of April offers from a Taiwanese major with $50/ton increases last week, players expect a new round of hikes for May shipments. However, many concur that such a large increase may see resistance from buyers as demand is expected to cool off after the second half of May.

A trader reported healthy demand, saying that the only problem is supply limitations from regular Asian suppliers. “The Taiwanese major had significantly reduced allocations this month while other Korean and Japanese suppliers have also easily sold out.”

A buyer in Delhi also pointed out the constant increases in the domestic market and the expectations that further increases may come from domestic suppliers. “The PVC market is currently balanced in terms of supply and demand. However, in line with the arrival of import cargoes in April, supply could outweigh demand, as this was the situation in April 2015. Considering the start of the monsoon and fading demand, the market may turn down in June,” opined the buyer.

“If import PVC prices rise by a similar amount for May shipments and prices go above a new threshold, buyers may show resistance given the fact that those materials will arrive at the end of May, when the monsoon season will kick off,” said another buyer in Mumbai.

A source from a global trader also acknowledged the possibility of similar hikes for May shipments, although he thinks that the degree of the possible hikes will be small given the start of monsoon and the fact that demand falls by 30-50%.

There are other traders who voice similar opinions as they expect the firming trend to continue until mid-May. However, they do not think that import PVC offers will be workable if they move up too swiftly in May.
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