PVC downturn persists for Dec as demand fails to improve in India
Expectations were suggesting rollovers or slight decreases given the recovery signs from the Indian market, higher ethylene prices as well as the recent rally of the energy complex. However, demand in India appears to have been not strong enough to pull the market up. Prior to the expected announcement, a seller had said, “Taiwanese major’s new offers will depend on the state of demand in India.”
Although the Taiwanese major was reported to have sold out its December quotas to India already, mainly traders have secured their regular cargoes rather than converters. Plus, traders in India are sitting on comfortable stocks after their replenishment in the past two months.
Following suit, a Chinese acetylene-based PVC producer also applied decreases of $25/ton to India from last week. A producer source said, “We lowered our prices as we are facing difficulty in concluding deals in India and it is hard to compete with ethylene-based PVC.”
Meanwhile, a domestic producer in India has lowered its local PVC prices by $60/ton.
A pipe manufacturer said, “We continue to stand on the sidelines as the near term outlook remains uncertain.”
However, some players expect demand to improve in India by December as the effects of the monsoon season will be totally over, as was the case last year. Plus, the Indian government is considering cutting the GST rates in order to boost domestic demand.
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