PVC prices’ uptrend continues with another sharp hike of Rs3/kg, or 3.4%, w.e.f. 17th Sep’20. This is the seventh price hike in Q2-TD totalling to Rs 14.5/kg or 18.9% even after a sharp spurt witnessed in May’20 and Jun’20. PVC prices, which now stand at Rs 91.3/kg, have risen 39.2% since 1st May’20. The surge has been largely led by higher international PVC prices amid supply-side issues.
Supply shortage globally aids further spurt in PVC prices. With the uptick in trade activities across the globe and recovery in crude prices, PVC prices recovered fully in Q1FY21 itself. Post that PVC prices again started trending higher with seven price hikes in Q2-TD totalling to Rs 14.5/kg or 18.9% (Rs 1.5/kg on 16th Jul’20, Rs 2/kg on 1st Aug’20, Rs 2/kg on 13th Aug’20, Rs 2/kg on 19th Aug’20 and Rs 2/kg on 1st Sep’20, Rs 2/kg on 3rd Sep’20 and now Rs 3/kg on 17th Sep’20).
These price hikes are mainly attributed to supply-side issues and the plant shutdown by Formosa in the US, which led to higher international PVC prices. The price surge reflected the international trend triggered by hovering tightness from the supply side after the shutdown of the largest PVC plants of Formosa in the US, as the key exporter decided not to offer PVC volumes for export in September as was the case in July and August. Formosa Plastics Corporation, USA, has been facing issues in operating its upstream chlor-alkali facility at Point Comfort, Texas, thereby impacting the PVC production at its both manufacturing sites in Louisiana and Texas.
Market players are leveraging market potential looking at the improvement in PVC market performance despite the industry grappling with COVID-19 led lockdowns. WPC Industry is eagerly looking for the price to be settled as soon as possible. PVC price hike has become a sensitive issue for manufacturers and traders and market has started feeling little stagnant situation. Industry is strongly expecting a support from domestic manufacturers. It was a time started where Prime minister’s Vocal for Local’ campaign impacted positively for domestic PVC WPC manufacturers. Lot of imports were getting stopped and Indian WPVC industry was getting fast boost. But this unfortunate price hike phenomenon has downgraded the market emotions for a while right now.
We look forward for a positive news for resuming PVC supply at original prices soon. Domestic Resin producers can be instrumental at certain level to support the situation.
Sources: ICICI Securities report under polymer price tracker & chemanalyst.com
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