Asian PVC markets poised for further hikes despite BIS deferral

Asian PVC markets anticipate another month of price increases, even as India’s Bureau of Indian Standards (BIS) surprisingly postponed the introduction of quality controls. A major Taiwanese producer’s July offers confirm this trend, primarily driven by surging freight costs.

The producer raised its July PVC K67-68 offers for the second month in a row. Prices to India jumped by $45/ton to $765/ton CIF, while offers to China increased modestly by $10/ton to $720/ton CIF. FOB Taiwan offers also rose by $10/ton to $680/ton.

"In India, people were expecting an increase from the Taiwanese major, but not such a big increase. The highest expectation was $30/ton," an Indian trader noted.

The larger hike for India is largely due to a 60% surge in freight rates from China and Taiwan over the past two months. Import costs spiked, driving stronger PVC offers. Meanwhile, smaller hikes to China reflected stable freight and more cautious demand. Traders expect the bullish momentum to continue, with July allocations likely to be snapped up quickly. “From $45-50/ton container freight rates, we’ve seen rates above $75/ton now on the China/India lanes,” a trader noted.

Freight surge and expected BIS controls drive market

PVC prices across Asia rose through June, driven by expectations surrounding India’s BIS regulation and escalating freight costs. Last week, the BIS implementation was deferred by six months to December 24, 2025, surprising many in the market. At the same time, concerns over the expiration of the 90-day pause on US “reciprocal trade tariffs” led to overbooked vessels and logistics bottlenecks, further pushing up shipping costs.

These developments lent continued support to Asian PVC import markets. Weekly ChemOrbis price averages were up $2/ton month-over-month at $662/ton CIF SEA, and flat at $685/ton CIF China, both near four-month highs. India, however, stood out with a $25/ton rise to $740/ton CIF, hitting a six-month peak.

Indian market more bullish than others

India’s PVC market has been particularly bullish due to BIS expectations and sharp freight increases. The BIS extension offers relief, especially for Chinese producers who delayed shipments. Despite this reprieve, India’s PVC market firmed, with Chinese-origin offers around $710-720/ton CIF India.

Strong domestic demand and anticipated hikes from the Taiwanese supplier further supported the market. “Actually, there are not many offers below $720/ton. You may perhaps find a few deep-sea ones but even those are not many,” an Indian trader said.

In Southeast Asia, PVC prices posted their first rebound since late March, recovering from five-year lows, driven by rising freight and improved China sentiment. However, demand remains weak, with buyers replenishing as needed. Chinese-origin cargoes remained at the low end of the regional price range, but oversupply concerns grew as Chinese producers redirected shipments from India, limiting significant price upside.

In China, PVC prices edged higher for a second week, supported by stronger crude oil prices and firmer Dalian futures. Local and export offers rebounded slightly, but caution persists due to seasonal demand weakness. Export prices rose slightly due to higher freight and production costs, but deal volumes remained low, particularly with Indian buyers. The BIS extension temporarily eased regulatory pressure, but fundamentals remain fluid.

Post-monsoon demand to lift market

In July, Asian PVC prices are expected to rise as sentiment improves with the increase in freight rates and downstream operators stock up for post-monsoon demand from India’s infrastructure and agricultural sectors. S&P Global Ratings revised India’s GDP growth projection upwards to 6.5%, citing a normal monsoon, reduced crude oil prices, and monetary easing.

Lack of infrastructure tenders despite higher capital expenditure is a drag. However, minimal buying in H1 suggests government tenders could emerge in August-September, leading to pent-up demand. The normal monsoon also suggests a good harvest for the kharif, or monsoon, crops, which would increase rural incomes and purchasing power. India’s rural economy accounts for about 50% of the overall consumption in the country.