FOCUS: PVC offers roll over in India, up in Pakistan

07 May 2007 12:13  [Source: ICIS news]

SINGAPORE (ICIS news)--Strong demand exerted upward pressure on local polyvinyl chloride (PVC) prices in India and Pakistan but a stronger Indian rupee has capped prices there, traders and producers said on Monday.

 

Indian producers have rolled over their local offers for May from April despite strong demand and tight supply, to off-set the additional costs their customers face due to a stronger local currency, domestic producers said.

 

The value of the Indian rupee has risen to Rs40.85 against the dollar, up 7% from Rs44 a month earlier.

 

“This appreciation has eroded our competitiveness against imports, and prevented us from raising domestic prices of PVC this month,” an Indian producer said.

 

PVC was offered in the Indian market at Indian rupees (Rs) 45.5/kg EXW (ex-works) for May lifting, unchanged from April.

 

In contrast, domestic offers in Pakistan have risen by Pakistan rupees (PRs) 2/kg to PRs69-70/kg in May on strong demand, as the country's local currency value was relatively stable to the US dollar, suppliers said.

 

In Pakistan, prices were pushed up by strong demand from the construction, water supply and sanitation segments.

 

Strong demand and higher domestic prices prompted Pakistan's sole PVC producer, Engro Asahi Polymers and Chemicals, to cut back on exports and divert its cargoes to the local market, an Engro source said.

 

"Demand for PVC is projected to grow by 10-12% in 2007, especially in the construction and water supply segments," he said.

 

PVC demand has also been robust in India, especially from the construction and irrigation applications segments. However, the rise in the value of the local currency has deterred producers' price hike aspirations.

 

Supply has been tight in India in the run-up to the 20-day turnaround of Finolex Industries’ 140,000 tonne/year line at Ratnagiri, Maharashtra state, due to begin from mid-May, suppliers and traders said.

 

Major PVC producers in India include Reliance Industries and Finolex.

 

($1=Rs40.85/PRs60.55)

 

By: Prema Viswanathan
+65 6780 4359

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