Weak Demand and Surging Supplies Cast Bearish Shadow on India's CPVC Market

The bearish market sentiments have taken hold of India's Chlorinated Polyvinyl Chloride (CPVC) prices as demand remains weak ahead of the abundant supply along with a consistent movement of overseas cargoes. Despite starting the year with price increases, the markets softened in March and have declined since then due to strong import arrivals, particularly from China, which have further bolstered the supply situation. Additionally, oil prices experienced a decrease in mid-May, with concern over oil supply and low revival of economic conditions impacting the operational costs of the CPVC.

Traders have noted that lowered price momentum of the crude oil and the upstream Polyvinyl Chloride (#PVC) market has significantly contributed to the downward trend for CPVC prices. Moreover, market participants have been primarily seeking negotiations at lower price levels instead of stockpiling, anticipating further price drops.

The return of Chinese producers from turnarounds has led to a surge in availabilities in the Indian market. In the Indian import market, prices for PVC have continued to decline, while ample supplies have provided some support to the commodity prices. Prices for CPVC pipe grade remained unchanged in April 2023 due to a slowdown in the offers from domestic agriculture and other household segments.

In addition, the price of CPVC for Pipe grade remained low in mid-May 2023, and, as per the latest database, CPVC prices are expected to continue to fall in May 2023 amidst insufficient downstream support from the regional market.

The downward trend of upstream PVC prices is reflective of the bearish sentiment across Asia impacting CPVC overseas discussions. The ample availability in the regional market has further pressured prices. At the same time, some players witnessed an overall weakened buying interest.

As per ChemAnalyst, CPVC prices are expected to follow lower movement in the H2 of Q2 of the year due to an ease in the inflationary pressure on the market participants and sufficient imports from China.

Moreover, market players believe that price drops will reach a turning point in the coming weeks as demand tends to improve, and consumers are waiting for prices to stabilize rather than fall endlessly.

- Market analysis from chemanalyst