Post-Diwali outlook for demand under discussion in India

In India, PVC players were away from their desks due to the Diwali holiday for the most of this past week. Right before the holiday, the market was shaken by the news that a major Taiwanese producer sold out its November quota within the same day of its announcement on Monday. Despite this, the post-holiday demand outlook remains as a question mark among many players who argue that the producer’s quota was mostly absorbed by traders, instead of end-users.

A trader in India commented, “The Taiwanese major sold out its quota in one day, yet we think that this doesn’t reflect the real status of demand in the country since the allocation was mostly purchased by traders, including us. Converters, on the other hand, preferred to wait on the sidelines in line with their expectations to see further decreases in the post-holiday period. We built some stocks as the producer’s November offer was lower than we expected.”

A second trader noted, “The major Taiwanese producer’s November quota to India was 20,000 tons, two times more than October. They sold out their November quota mostly to traders. Many end-users, however, delayed their purchasing activity to the post-holiday period.”

A source from an Indian PVC producer said, “Demand in the local market remains quite poor. We hope that converters will return to the market for replenishing their stocks after the holiday next week.”