March PVC cuts fail to spur demand in India, SEA; is a late Q1 recovery still within reach?

PVC markets in India and Southeast Asia remain under pressure as recent price cuts for March shipments failed to generate strong buying interest. Indian buyers continue to tread cautiously amid ongoing anti-dumping duty (ADD) uncertainty and government budget constraints, while Southeast Asia grapples with sluggish demand and ample Chinese supply.

Looking ahead, traders are hoping for a potential recovery in India’s demand next month, which could lead import prices to rebound from their current five-year lows. However, clear signs of a market turnaround remain elusive.

ADD and budget uncertainties keep Indian buyers at bay

Some traders in India reported that the Taiwanese major’s March allocation to the country was around 20,000 tons, yet market estimates suggest only 12,000-15,000 tons were sold. “Normally, these shipments sell out within hours of the pricing announcement. The fact that sales are slower this time underscores weak demand,” a trader explained.

The long-awaited decision on ADD continues to hold back Indian buyers, who fear their shipments could be affected if duties are imposed while goods are in transit. “Without clarity on ADD, demand is unlikely to take off,” another trader noted.

The ADDs were provisionally announced in early November, but their actual implementation has not happened, leading to Indian players slashing import buying. The provisional ADDs announced in November ranged from $82-167/ton for Chinese imports, $25-163/ton for Taiwanese, $73-200/ton for Indonesian, $54-147/ton for Japanese, $51-161/ton for South Korean, $53-184/ton for Thai, and $164-339/ton for US imports.

Additionally, delayed government payments and budget constraints have slowed infrastructure-related demand, leaving converters wary of making bulk purchases. As a result, most buying activity remains limited to immediate needs rather than stockpiling. “The February 1 budget hasn’t triggered an infrastructure-led demand surge yet, but we expect an uptick when new project tenders emerge,” a trader added.

Chinese oversupply remains a key concern

The persistent oversupply of Chinese PVC continues to weigh heavily on the markets. Chinese ethylene-based PVC dominates the lower end of the price spectrum, keeping downward pressure on regional prices. Market players note that despite price reductions, Chinese-origin cargoes remain abundant, and this excess supply limits any significant recovery in pricing across India and Southeast Asia.

SEA grapples with weak demand; Ramadan likely to further slow activity

Market sentiment in Southeast Asia weakened further after the Taiwanese major announced March price cuts of $5-20/ton. A regional trader observed, “Despite these reductions, buying appetite remains weak. Most converters are holding back, given the sluggish macroeconomic environment and downstream markets.”

Meanwhile, With Ramadan beginning on February 28, demand in Malaysia and Indonesia is expected to slow further. Traditionally, construction and industrial activity decelerate during this period, leading to softer market conditions. Many traders foresee stable-to-slightly lower prices in the coming weeks as buyers delay purchases until after the fasting month.

Will India’s pent-up demand emerge in late Q1?

Despite current weakness, some market players remain hopeful that India’s demand will recover in late Q1. Expectations are pinned on pent-up demand from the infrastructure sector, with the possibility of fresh government tenders boosting PVC consumption.

“While ample supply from China may continue to weigh on prices, pre-peak season restocking could help fuel a recovery. Demand in Southeast Asia and China could also pick up alongside India, supporting firmer pricing,” an Indian trader commented.

According to ChemOrbis Price Index data, India’s import PVC market has lost nearly 25% of its value since July 2024, leading many traders to believe an upward correction is overdue. However, whether this correction materializes depends on greater clarity regarding ADD policies and broader economic stability.

“The market lacks clear direction due to the ongoing ADD discussions,” a trader remarked. “Most players expect duties to be imposed, but the timing is uncertain. Buyers remain hesitant, fearing their shipments could be impacted if ADD is enforced while goods are in transit. Greater clarity is needed before the market can gain momentum,” he added.