Indian PVC sees first price rally after weeks of decline
Import PVC prices in India recently increased slightly after 10 consecutive weeks of decline. Most sellers adopted a bullish stance on quotes this week following some earlier forecasts that the market could bottom soon after the major Taiwanese producer dropped $130/ton in July.
Accordingly, the price of imported K67 from all origins increased slightly by 10 USD/ton compared to the previous week, to 1350-1450 USD/ton CIF India, cash. The high segment is the quotation of goods of Japanese origin, while the Korean K67 quote is in the low segment.
Slight increase in demand encourages sellers
This week, most sellers pulled low quotes from the market to move back into higher prices after they saw a slight increase in buying demand. Some finished product companies have started stockpiling inventories at prices in the lower end of the market, fearing that prices may have bottomed out.
A trader based in Mumbai said: “The import PVC trade has seen strong buying at low quotes. But these quotes quickly dried up, causing vendors to pull out of the market and uplift the low-priced segment.”
Earlier this week, a Korean producer raised import quotes from $1300/ton to $1330-1340/ton and they saw strong buying at that price. Another trader said: “Shortly this producer pulled out of the market and came back at a higher price.”
Meanwhile, a Japanese producer said he increased the price of K67 by 50 USD/ton, to 1450 USD/ton CIF India but soon they started to reject the purchase price at this level.
The trader added: “We also saw a Thai producer reject a bid at $1,410/ton after listing it for $1380/ton CIF, cash just three days ago. All vendors are currently keeping their quotes or withdrawing from the market to return to higher prices.”
Starting to have forecasts for August
A major Taiwanese manufacturer is expected to announce August PVC prices to the Asian market early next week.
According to most market participants, the producer can quote August prices according to the latest import quotes on the spot market. Last month, the major producer reduced its July quote by $130/ton, to $1,390/ton CIF India.
Some market participants initially expected the producer to cut August quotes by as much as $90/ton, as demand concerns persisted in light of the COVID-19 situation in Asia. However, recent bullish bids from South Korean, Japanese and Southeast Asian manufacturers have altered sentiment in the country and prompted Indian market participants to reconsider their August forecasts. their.
A trader said: “We were hoping for another strong discount for the large Taiwanese manufacturer's August shipments to India. But we are now anticipating a smaller drop, after South Korea's price hike.”
Some have also argued that if the recent uptick in the spot market is sustained, the producer may even be able to access regional markets at flat or slightly increased prices.
However, the majority of market participants are skeptical about the increase in monthly quotes, as this major producer's July quote in India of $1,390/ton CIF India is still above the low-priced segment currently on the market.