Stats: NE Asia’s PVC suppliers face declines in Q3 exports, ADD uncertainty clouds Q4

According to data from ChemOrbis Stats Wizard, leading PVC supplier countries in Northeast Asia saw declines in their export volumes during Q3 2024. China, South Korea, and Taiwan reported lower sales compared to both Q2 2024 and Q3 2023. Japan, however, bucked the trend with a notable quarterly gain, despite a year-on-year decline. Meanwhile, India’s recently announced provisional anti-dumping duties (ADDs) cast uncertainty on Q4 trade dynamics for these suppliers.

Q3 2024 Performance: Declining exports from NE Asia

China led Northeast Asia’s PVC exports in Q3 2024 at 660,000 tons, but shipments fell 6% from Q2 and 8% year-on-year. South Korea’s exports dropped 5% quarterly and 6% yearly to 144,000 tons, while Taiwan saw sharper declines of 9% and 13%, shipping 292,750 tons.

Japan was the exception, increasing quarterly exports by 32% to 164,080 tons despite a 7% year-on-year decline.

India: Largest buyer of NE Asian PVC, but volumes decline

India retained its position as the largest buyer of Northeast Asian PVC during Q3 2024, accounting for a substantial share of exports. However, import volumes from major suppliers declined year-on-year, except for South Korea, as Indian buyers adopted a cautious stance due to uncertainty surrounding the ADD investigation timeline and its potential impact.

China exported 330,000 tons of S-PVC to India in Q3, accounting for 52% of its total exports. This represented a 7.3% year-on-year decline. Taiwan sold 116,000 tons of PVC to India in Q3, 40% of its total exports, down 6% year-on-year. Japan exported 104,000 tons of PVC to India, making up 63% of its total exports. This was a sharp 20% year-on-year decline. South Korea stood out with a 9% year-on-year increase, exporting 85,000 tons to India, representing 59% of its total exports.

Heavy reliance on India exposes NEA suppliers to ADD risks

With over half of Northeast Asia’s PVC exports destined for India, the region’s suppliers face a precarious position as India’s proposed anti-dumping duties (ADDs) loom.

The Directorate General of Trade Remedies (DGTR) has proposed provisional ADD rates, ranging from $25-339/ton, targeting imports from China, Japan, South Korea, Taiwan, Thailand, Indonesia, and the US. Chinese producers, already managing oversupply and capacity expansions, could face the brunt of the impact, as over 50% of China’s PVC exports head to India.

This heavy reliance on India underscores the vulnerability of Northeast Asian suppliers, who may need to explore alternative markets or adjust strategies to mitigate the fallout from the proposed ADDs.

Outlook for Q4 and beyond

India’s Ministry of Commerce recently rescheduled the oral hearing for the ADD investigation to December 4, 2024. Exporters are racing against time to ship PVC before the proposed ADD implementation date of November 28, 2024, which could impose duties retroactively on delayed cargo. Reports indicate that some Indian buyers have been canceling orders or renegotiating prices for shipments in transit, reflecting market unease.

In October, for instance, China’s S-PVC exports to India faced a significant drop of 32% from September to reach 104,000 tons, while South Korea recorded a 3% decline on month.

As Northeast Asian suppliers brace for potential ADD impacts, alternative markets like Southeast Asia, Africa, and the Middle East could emerge as key destinations. However, these regions may struggle to accommodate the displaced volumes from India, given their relatively smaller market sizes and localized supply-demand dynamics.

Moreover, heightened competition in these secondary markets could exert downward pressure on prices, further challenging exporters already grappling with higher production costs and regional oversupply.

While the exact outcomes of India’s ADD decisions remain uncertain, Northeast Asia’s PVC suppliers face a crucial period of adjustment amid the shifting trade landscape.