30 December 2008 08:30 [Source: ICIS news]
By Prema Viswanathan
SINGAPORE (ICIS news)--Demand for polyvinyl choride (PVC) is likely to grow only in single digits in 2009 in both the Middle East and South Asia due to the global economic meltdown, a far cry from the bullish consumption trends seen in the past few years, suppliers and buyers said on Tuesday.
“The construction sector, which is the main driver of PVC demand, has begun to slow down, in tandem with slowing gross domestic product (GDP) growth, in all regions, and this will have a huge impact on PVC consumption,” said a Middle East converter.
The slowdown would have an impact on PVC prices, which have only recently begun to firm, after declining sharply from July to November.
“Prices are expected to be volatile in 2009, swinging up and down in tandem with the demand-supply dynamics being played out in the markets,” said an Indian PVC trader.
In the ?xml:namespace>
“We have not felt the impact so much this year, but once the current construction projects are completed, we will definitely see infrastructure projects being delayed due to liquidity constraints and the economic slowdown,” he said.
Middle East consumption of PVC is estimated at around 1.4m tonnes/year in 2008, while capacity is a little over 700,000 tonnes/year, which leaves a shortfall of 700,000 tonnes/year met mostly by imports from Asia.
The 500,000 tonnes/year of expected additional capacity from
In India, PVC demand was flat during the period August-October, but began to pick up in November, said a PVC producer. “The reason demand is picking up is mainly thanks to the irrigation pipes segment, which is still going strong,” he said.
The construction sector, which had been the main driver of PVC demand in the past couple of years, has been on a decline, in line with the lower GDP growth projections for 2008-09 of 7% versus 9% the previous year, he added.
Last year’s strong demand led many Indian producers to directly import PVC cargoes from northeast and southeast
“However, after August this year, we haven’t imported any cargoes as demand was very sluggish until November, and we have sufficient inventories to meet our customer commitments until the end of the financial year,” said a second Indian producer.
Earlier this year, producers had forecast that
However, these forecasts have been revised down significantly following the global financial crisis, and current projections are that
PVC consumption was estimated at 1.4m tonnes in 2007-08, far exceeding
On the supply side, Indian capacity will increase by 200,000 tonnes/year in the first half of 2009 when ChemPlast’s new plant starts up.
Demand is also expected to grow in single digit in
Please visit the complete ICIS plants and projects database
To discuss issues facing the chemical industry go to ICIS connect
For more on PVC visit ICIS chemical intelligence
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections