The blockbuster rally in India’s PVC market has run out of steam and import K67 prices have receded from their all-time highs this week in the face of rapidly reduced demand amid a second wave of deadly infections.
Import PVC K67 prices of overall origins were assessed $30/ton lower from last week at $1640-1700/ton CIF India, cash basis.
Despite the fall, the weekly average of PVC prices on CIF India basis remained 260% higher than the levels in May 2020, when the longest ever price rally first kicked off.
COVID-19 crisis likely to dampen pre-monsoon buying interest
India’s death toll from the pandemic has gone beyond 200,000 amid a shortage of oxygen, medical supplies and hospital staff. The deadly second wave has seen around 300,000 people tested positive for the virus daily which has overwhelmed healthcare facilities.
PVC players in the country reported that downstream manufacturing sectors are again facing disruptions since more states impose fresh curbs on public movement and transport to contain the spread of the virus. “We might face closures at ports due to partial lockdowns, and PVC supplies to the country might be disrupted,” a few players commented.
With the surge in COVID-19 cases yet to reach its peak, market players expect sharp pressure on PVC demand and prices in the near term. “We may not see the traditional demand increase ahead of the monsoon season this year due to the COVID crisis in the country,” noted traders.
India’s monsoon season lasts from June to September and stretches longer in some years. During that period, heavy rains impede both building construction and agriculture sectors while rough seas make loading and unloading at ports difficult.
Prices may remain under pressure despite still-tight supplies
Most players believe that PVC prices in India may remain under pressure over the near term given fading demand amid the second wave of the pandemic.
“We might see lower June offers from a major Taiwanese producer despite the ongoing shortage of availability across regional and global markets,” some commented.
The Taiwanese major lifted its May offers by $30/ton after applying a massive hike of $300/ton for April.