Firming trend disrupted in India’s PVC market
A source from the Taiwanese major said, “The end of the monsoon season had resulted in improved demand in India and we could obtain modest hikes in October. However, considering the upcoming Diwali holidays in the country we do not think that demand will pick up until late November. Therefore, we prefer to go ahead with rollovers for our November offers.” The source also pointed to spot ethylene prices in the US which have been trading at their lowest level since early 2009, arguing that this may put pressure on PVC.
An Indian trader interpreted the rollover decision of the Taiwanese producer as an attempt to keep Chinese PVC away from the Indian market. A second trader underscored the same sentiment, noting that 90% of Chinese imports find their way to Northern India, where pipe makers prefer this origin for their applications.
Other players affirmed the slowing business ahead of the Diwali holidays, which are to be celebrated between November 10 and 25 in different parts of the country. Restricted cash flow is also hindering trading activity and this is pushing the Taiwanese major to offer more flexible payment options, according to some players.
“PVC has been showing its worst performance in the past 15 years, in our opinion. The slowing economy and construction sector is not driving PVC demand up while the recent El nino related drought has also caused farmers to suffer in India,” commented another trader. Therefore, he does not think that import PVC suppliers will secure a high level of orders for November.
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