What will happen to the PVC market in India after the July price fall?

According to industry experts, after a fall of around 16% in the price of PVC in India, equivalent to around $130/tonne at the beginning of July, a rebound appears to be possible.

In fact, the average price of PVC stood at around $1400/Ton CIF India for the first time since the beginning of February, with some distinctions on the types of PVC that make up the reference basket. According to data from the ChemOrbis Price Index, the weekly average of K67 PVC prices, on a CIF India basis, has recorded a total decline of $/Ton 280/ since the start of the downtrend in late April.

However, average prices remain at around $780/Ton, above the levels seen in May 2020, the date on which the longest bullish rally in the history of plastics began.

The explanation for this drop in prices could be found in the second wave of COVID 19 that hit the country, with the consequent reduction in production due to the low demand for finished products.

This phenomenon has calmed prices, causing PVC prices to fall, also in relation to the fact that lower production means a lower number of wage earners at work and, consequently, a lower spending capacity of families.

But in the short term, PVC prices are expected to rebound due to likely post-monsoon demand. The rainy monsoon months of June to September are typically a low-demand season for the PVC end-user market in India.

Buyers tend to start stocking up for the post-monsoon season in August when demand starts to pick up. “Buying for the post-monsoon season begins in August and this is another reason why prices are expected to rise,” the Mumbai-based trader said.