PVC Prices Witness Another Hike, Prevailing Supply-Side Issues Raise Offers

As per the latest revision in domestic Polyvinyl Chloride rates, the prices firmed and continued trending higher by INR 2 per kg, or 2.4%, w.e.f. 1st Sep'20. This is the fifth price hike within the quarter although the polymer witnessed a sharp spurt in May and Jun this year. PVC prices have been settled to the levels of INR 86.3 per kg, depicting a hike of 31.6% since 1st May 2020. 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. The price uptick has been exacerbated by surge in demand for PVC and CPVC pipes. Analyzing the market trends, the PVC players have recorded robust sales of PVC pipes due to higher demand for agricultural pipes since the second half of Q1FY21. The prices of CPVC pipe prices also registered 3-5% price hike in the first week of March due to a sharp spurt in the demand patterns. Market players are leveraging market potential looking at the improvement in PVC market performance despite the industry grappling with COVID-19 led lockdowns.