For US PVC producers, India duties revision ‘changes everything’

By Bill Bowen

HOUSTON (ICIS)–The Indian government’s revised schedule of anti-dumping duties (ADDs) for suspension-grade polyvinyl chloride (PVC) will likely result in additional inexpensive Chinese material looking for a home in nearby export markets such as Turkey and Egypt, creating additional pricing competition for material from the US and Latin America, market participants said on Tuesday.

The Indian government on Tuesday imposed stiff penalties on most US, Mexican and Chinese material while giving more favourable treatment to shipments from particular producers in Taiwan and South Korea.  

“This changes everything,” a major US producer said on Tuesday. The producer noted that India is not a large market for US PVC exports and so most effects to US producers will be tangential and occur in other markets.

The revisions were expected on 4 March when existing ADDs were up for review. But that was delayed by a month, and producers declined to sell into the market not knowing what duties may or may not apply. That sent Asian PVC prices plummeting as exporters to India looked to sell product bound for that market elsewhere while the rules were being revised.

Those price drops echoed globally, sending export prices down in the US, Europe and Latin America after Formosa lowered its Asian benchmark price by $40/tonne and buyers bid even lower.

Prices in Asia have declined by an average $53/tonne, down to $1,017/tonne CFR (cost and freight) southeast Asia on 4 April from $1,070/tonne CFR southeast Asia on 21 February. US prices moved down to an average of about $1,000/tonne FOB (free on board) USG (US Gulf) in the past two weeks from about $1,040/tonne FOB USG.

But the downward drift should end soon with the decision by the Indian Department of Commerce, which was dated 4 April but distributed on Tuesday.

New competition will likely emerge in the Mediterranean market, where US and Chinese product may go head to head to gain new market share, market participants said.

The ADDs renew and revise ADDs that were first imposed more than a year ago.

The duties were imposed against imports of PVC suspension grade originating in or exported from Taiwan, China, Indonesia, Japan, South Korea, Malaysia, Thailand, the US, the EU and Mexico.

Chinese product is subject to duties of from $91.27-147.90/tonne, according to tables provided by the Indian government.

Taiwanese major Formosa’s PVC exports from its home country and the EU are exempt from ADD payments, while all other Taiwanese PVC lots originating in Taiwan or any other country are subject to ADDs in the range of $9.47-61.25/tonne.

Most US exports to India will be charged duties of $115.54/tonne. But US producer Westlake’s exports to India are subject to ADDs of $29.99/tonne, while Formosa’s exports from the US by Tricon Dry Chemicals will be charged ADDs at $31.22/tonne.

Other major US producers include Axiall, OxyChem and Shintech.

Mexican PVC major Mexichem’s exports to India will be subject to ADDs of $88.10/tonne, while all other Mexican cargoes originating in and/or exported out of Mexico would be subject to ADDs of $163.05/tonne.

Most US producers contacted on Tuesday said that they did not respond to the Indian government’s request for shipping costs and other business details, considering them proprietary, and were therefore treated more harshly.

They said that the downward slide in prices should end in the coming days and weeks as new trade balances form.

Additional reporting by Veena Pathare