18 November 2011 10:25 [Source: ICIS news]
SINGAPORE (ICIS)--India’s Reliance Industries Ltd (RIL) has raised its domestic list prices of polyvinyl chloride (PVC) by Indian rupees (Rs) 2/kg (4 cents/kg) on the back of the depreciation of its local currency, industry sources said on Friday.
The price increase came into effect on 17 November, a company source said. The new PVC prices are at Rs61/kg EXW (ex-works), inclusive of a 10.3% excise duty and 2-4% value added tax (VAT), depending on the state.
The company had several reasons for increasing its domestic list prices, including higher feedstock vinyl chloride monomer (VCM) costs, according to market sources.
“Feedstock VCM prices have increased because of the shutdown of the Tosoh’s three lines,” the major producer said.
Tosoh Corp shut all its three VCM lines, with a total capacity of 1.2m tonnes/year, at Nanyo in Yamagata after an explosion at the facility on 13 November.
Prices of VCM in northeast Asia rose by $60/tonne (€44/tonne) on a cost and freight (CFR) northeast Asia basis from last Friday, according to ICIS data.
India’s VCM prices, on the other hand, increased by about $40/tonne this week, local sources said.
RIL added that the rupee’s depreciation had dampened import demand: “The falling Indian rupee exchange rate makes imports expensive to buyers and they prefer domestic material to overseas cargoes.”
Domestic cargoes also have much shorter delivery times as compared with imports. Asia and US origin cargoes have lead times of about two weeks and 45 days, respectively.
Market sentiment in the PVC industry is improving after months of depressed prices, local producers said. “Buying activity is at its best compared to the previous three months,” RIL said.
Buying ideas in India were heard higher at about $900/tonne CFR India for cargoes of Asian origin, which are exempt from anti-dumping duties (ADDs), and about $880/tonne CFR India for US material, subject to ADDs of $45/tonne.
The import parity of the new list prices, quoted by a separate local producer, was at about $950/tonne CFR India.
However, cargo bookings were mostly small and frequent, because of ongoing concerns over the poor macroeconomic climate in the eurozone.
($1 = Rs50.96, €0.74)
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