SINGAPORE (ICIS)--Trade in Asia’s polyvinyl chloride (PVC) market is expected to remain subdued in the near term as the rainy season in Vietnam and Thailand continues to weigh on demand.Polyvinyl chloride (PVC) is used in pipes. (Source: Marion Fichter/imageBROKER/Shutterstock)
In addition, China’s import demand has remained dull due to a sluggish economy, despite trade talks resuming between China and the US after the recent G20 summit in Japan.
Uncertainty was also generated following changes in anti-dumping duties (ADDs) and import duties for PVC in India, a major importer in the region.
In the week ended 12 July, average prices of PVC were flat from the previous week at $885/tonne CFR (cost and freight) China and $870/tonne CFR SE (southeast) Asia, according to ICIS data.
India’s government recently removed ADDs imposed on most countries in June, but postponed making a decision to remove those that apply on imports from Thailand, China and the US until 12 August.
Thai cargoes are therefore still subjected to ADDs of $48.21/tonne, on top of the 5% import duty that apply to southeast Asian cargoes flowing into India.
PVC cargoes from Japan enjoy the lowest import duty of 1.3% in India under a bilateral free trade agreement.
For all other countries, customs duties levied on PVC imports were raised on 6 July to 10% from 7.5% previously.
PVC cargoes from southeast Asia, particularly Indonesia, may therefore see a competitive edge in India.
But supply from Indonesia to the south Asian market is expected to remain limited in the near term, as Indonesian producers focus on domestic fulfilments, as well as exports to neighbouring countries such as Vietnam and Malaysia, said market sources.
The onset of the monsoon season in India has also weighed on demand.
Players were holding off discussions for August cargoes, preferring to monitor the market situation.
In the week ended 12 July, average prices of PVC were flat from the previous week at $875/tonne CFR India.
Focus article by Jonathan Chou
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