Indian players: Demonetization hampered PVC demand

Earlier last week, the Indian government surprisingly announced their decision to demonetize the high-denomination notes, causing a wave of liquidity issues in the market. This is due to the tardy pace of the currency notes exchange process, leading to money shortage in the market, which crippled businesses.

This takes place at the time PVC market is expecting December shipment prices from a major Taiwanese producer. Initial expectation is that the maker might possibly lift their offers by $40-60/ton, in line with the start of the high demand season in India and surging VCM costs across Asia. However, opportunity for such large hike has just got crushed. A trader in the country informed, “No one is interested to talk about businesses at the moment, and therefore we think price hike is impossible.”

A pipe converter added, “We are facing difficulties in moving our end product since the retail sector has been hit really hard. All we can do now is wait and see. We hope the government can speed up the process of notes exchange and take action to allay fears in the market.”

Players in the country are expecting this condition to last for at least a month and fresh PVC prices might only be announced in the coming week. Suppliers are now facing real dilemma in balancing the costs and falling buying interest in region’s major import ground.