Competitive Chinese, S. Korean offers drag India PVC market closer to pre-war levels

India’s import PVC market continued to weaken this week as buyers largely stayed out of the market despite increasingly competitive offers from Northeast Asia. Mounting oversupply, seasonal demand weakness and uncertainty surrounding India’s impending tariff policy deadline have intensified competition among sellers for a shrinking pool of demand, pushing prices closer to pre-war levels.

According to ChemOrbis Price Index data, the weekly average of the overall CIF India PVC K67 range fell to $760/ton this week. Compared to the late-March peak of $1080/ton, the highest level since mid-2022, the market has now lost 30% of its value. Importantly, prices now carry a premium of only $50/ton over the week preceding the outbreak of the Middle East conflict, indicating that nearly all war-driven gains have been erased.

Chinese and Korean suppliers compete for scarce demand

Market participants reported intensifying competition at the lower end of the market, where Chinese and South Korean suppliers continued to lower offers in an attempt to stimulate buying interest.

A source from a major PVC producer in Asia commented, “The market appears to be moving steadily lower. Korean-origin material is now largely following Chinese pricing levels.” Offers for Korean-origin material were reported as low as $720-725/ton CIF India, while ethylene-based Chinese K67 cargoes were heard at around $740/ton CIF.

An Indian trader described market conditions as exceptionally quiet. “Both the local and import PVC markets in India are currently experiencing an exceptionally quiet spell, marked by an acute lack of trading interest. A pervasive sense of inertia dominates the landscape, with buyers staying firmly on the sidelines as ample material circulates throughout the market,” he said.

According to the trader, abundant availability and weak consumption have left distribution channels stagnant, preventing even competitive import offers from generating meaningful inquiries. “Identifying exact market levels remains difficult amid rapidly changing conditions. Looking ahead, we do not expect the market to find a bottom anytime soon and believe any meaningful recovery is unlikely before August, provided current supply chain inventories are substantially reduced,” he commented.

He also pointed to the ongoing rainy season in East China, which is encouraging additional export shipments and could further exacerbate regional oversupply.

Exporters cite oversupply, falling costs and weak buying interest

Chinese exporters echoed similar concerns, highlighting falling upstream markets and persistent oversupply.

One exporter said export demand remains weak due to declining order volumes and continuous price erosion across key destinations such as India and Southeast Asia. “Indian buyers remain cautious ahead of the expiry of the country’s tariff exemption policy on June 30. Fewer buyers are actively seeking offers, and concluded deals remain limited,” he said.

Domestic market rebuilds premium after historic dislocation

While import prices have continued to decline, India’s domestic PVC market has undergone a different trajectory over the past two months.

According to ChemOrbis Price Index data, domestic PVC K67 prices also reached their highest levels since mid-2022 in early April before entering a period of sharp correction. The local market declined for four consecutive weeks, eventually falling below import prices by late April.

The inversion was highly unusual for India, where domestic PVC traditionally commands a premium over imports due to supply security, logistics advantages and established customer relationships. At the peak of the dislocation, domestic prices were reported at discounts of up to $80/ton compared to imported material.

Since then, however, domestic PVC has gradually regained ground. As import sentiment weakened further and buyers increasingly shifted attention back to local material, the traditional pricing relationship started to recover.

Over the past four weeks, the spread between the two markets has widened steadily. Despite this week’s declines in the local market, domestic PVC currently carries a premium of roughly $160/ton over imports, marking a remarkable turnaround from the unprecedented discounts seen only two months ago.

Fundamentals remain firmly bearish

For now, however, market participants agree that the widening domestic premium reflects weakness in imports rather than any improvement in underlying demand.

The annual monsoon has slowed construction and infrastructure activity across much of India, while uncertainty surrounding the expiration of the government’s temporary customs duty waiver on June 30 continues to discourage forward purchases.

With supply remaining ample across Asia, buyers adopting a hand-to-mouth approach and additional export cargoes expected from China, most players believe PVC markets will remain under pressure in the near term as the remaining war premium continues to evaporate.