Indian players: PVC demand might be better in the coming week

Demand for PVC in India has been mediocre to weak over the past months due to the repercussion of the demonetization and the implementation of the GST. All hike attempts by overseas suppliers over the past month faced stiff resistance, however, traders are becoming more optimistic about the near term market outlook.

In fact, one of the factors discouraged buyers from sourcing costly materials from import ground was the availability of the competitive domestic cargoes. Buying interest is expected to improve once local producers lifted prices after several weeks of maintaining the levels. A trader commented, “We expect local producers to announce new PVC offers this Thursday with INR1500-2000/ton ($23-31/ton) increased. This would stimulate demand for imported cargoes.”

Earlier this week, a major Taiwanese producer announced October shipment offers for PVC to India at $60/ton higher than last month, reaching $1050/ton CIF India, LC AS term. Most players are still on the wait and see mode.

Besides, Iranian cargoes are available at $930/ton CIF India this week, which is way more competitive than Fareast Asian material. “However, Iranian cargoes are facing serious delay as producers here are unable to operate at normal rate due to lack of ethylene. Some orders have been cancelled too. Which means, buyers shall need to source alternative cargoes to ensure stock levels,” another trader added.

Several other players also reported seeing a drop in import arrival this month stemming from weak purchasing activities previously. “And therefore, we are holding the cargoes, hoping that buyers might become more active this month though the monsoon season is about the start,” another trader informed.