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Nov PVC expectations offer mixed bag in India

by Shibu Itty Kuttickal -
  • 13/10/2022 (02:32)
Import PVC prices in India have fallen to a low for more than two years, with prices having fallen by about 57% from a historical peak reached in October last year. A bearish outlook continues as most buyers in India are looking for prices to come down even further and holding out for prices much lower than the lowest offers heard in the market.

ChemOrbis Price Wizard shows a fall of $45/ton, or about 5%, in assessed import PVC K67 prices into India over one month from the first week of September. In the week ending 9th October, import PVC K67 prices of overall origins were assessed stable from the previous week at $840-920/ton CIF, cash basis.

PVC – Import – India

Most players expect price cuts by Taiwanese major

Most players expect a major Taiwanese producer to cut its November offers to Asian buyers by up to $40/ton, a month after it cut prices by $100/ton to $910/ton CIF India and by $60/ton to $840/ton CIF China.

At the same time, a smaller section of the market expects a rollover to a slight increase in the Taiwanese producer’s November prices. This group attributes its outlook to the drying up of Chinese offers to India as also to a relatively smaller decrease in the FAS Houston prices for October.

Will US import offers continue to fall?

There were reports of US offers to India falling to the low-$800s/ton CIF, but these were not independently confirmed at press time. But traders said export prices from the US did not justify the reports of such low import levels.

“Export prices for October from the US Gulf have only fallen by about $10-20/ton to $750-760/ton FAS Houston. Although we’ve seen freight rates from the US to Asia also falling, there’s no justification for Indian buyers holding out for prices in the low-$800s/ton,” said an Indian trader connected to a major US producer.

An Indian buyer pointed out the likelihood of US exportable surpluses rising ahead of the year end and the fall in freight rates. But the trader said, “From what we have come to understand, US players are getting better netbacks from Latin American destinations. In such a situation, we don’t see a lot of US PVC being offered to India lower than $870/ton CIF.”

Chinese offers dry up

Moreover, he also pointed to the fact that Chinese offers to India have dried up ahead of an official investigation into the alleged dumping of Chinese PVC with a VCM content of more than 2%.

“Offers from China have completely dried up pending the conclusion of the ongoing probe,” another Indian trader said.

Indian domestic prices not too inspiring for bulls

Meanwhile, the Indian domestic prices have slumped over the last month by about 9% as a major producer in the country offered discounts of INR3000-6000/ton ($37-65/ton) for buyers willing to lift more than 8-12% of their annualised allotments.

“This points to some major availability with the Indian producer and we’d be watching closely its future price revisions. We’ve also seen local distributors of imported material also offering similar sweeteners,” said a Mumbai-based distributor.

Crude oil market sends bullish signal

Brent crude futures have seen an increase of about 4% since the first week of September, which bullish operators are pointing at for their positive outlook.

“The latest output cuts announced by the oil producers could result in oil prices rising ahead, leading to hikes in monomer and polymer prices too,” a Mumbai-based trader said. “We don’t think sellers will ignore the cost side and keep prices lower any more, especially as prices have been suppressed for a long period of time,” he added.
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