09 January 2012 04:31 [Source: ICIS news]
By Yu Guo
“The average growth rate for PVC sector in 2012 will hover at around 5%, up to 8% to be optimistic, compared with the high single- to double-digit growth, previously,” said a major Indian producer.
The country imported the balance of about 700,000 tonnes to cover its consumption. It has the second biggest PVC resin consumption in Asia, next to
“PVC consumption in
“A projected growth of around 7% in GDP [in 2012] translates to a more or less soft year ahead [for PVC pipe market] as there is not much booster in the industry,” the producer added.
The Indian economy is expected to slow down, with growth projected at 7.5% this year, down from 7.8% in 2011 and much lower than the 10.1% pace recorded in 2010, according to the International Monetary Fund’s World Economic Outlook.
PVC resins go into the manufacturing of pipes that are mainly used on the construction and irrigation industries. Construction accounted for 56% of
A 5% growth in PVC consumption in
“Traders found it difficult to sell to end-users as they have not been active in the import market,” said the trader Indian trader, adding that no end-user is willing to take any exposure in the import market in the last quarter of 2011
Trading activities had been lacklustre in the Indian PVC spot market in the last two months of 2011.
“The main concerns among players right now are currency issues and weak demand in the PVC downstream market,” said a local distributor.
“[The] weak Indian rupee will be an ongoing issue and it is closely linked to the soft economy that directly results to a sluggish construction sector,” the distributor added.
The rupee had depreciated by close to 16% last year and is expected to remain weak, weighed down by the ongoing sovereign debt crisis in
“[The] irrigation sector will likely be the sole driver in the PVC market this year and the only hope for importers to move some quantity at good prices will be the upcoming peak demand season [starting in late-January],” another converter agreed.
“The Indian market is not going to be the golden goose this year, unlike how it was back in 2010 and the first half of 2011,” a trader said.
Spot PVC prices in
($1 = Rs52.72 / $1 = €0.79)
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