LONDON (ICIS)--European producers and trading sources are unfazed by news of the sizeable anti-dumping duties (ADDs) levied on most polyvinyl chloride (PVC) export cargoes out of Europe to India, stating that India is not a main export destination for European sellers, and areas closer to Europe remain preferable, said market players on Monday.
The general view is that India is not a regular export outlet for European suppliers because of costly freight, long lead times and strong competition from Asian and Mexican suppliers.
The new ADDs will mean “an additional hurdle for European players to take volumes to India”, said one trader, and are likely to make PVC exports out of Europe even less feasible.
Most sellers in the EU are faced with duties of $189.99/tonne. However, INEOS Vinyls Deutschland GmbH Germany, INEOS Sverige AB Sweden, INEOS ChlorVinyls Ltd UK and INEOS ChlorVinyls Belgium NV have a lower ADD rate of $39.65/tonne.
European trading and producer sources remain upbeat despite the ADD news, stating that any missing exports to India could be balanced out by other export destinations.
One producer compared the export flow to water, stating that “it [exports previously sent to India] will just flow elsewhere".
This trading source said “it is not the worse thing that could happen to European players. Better for Asians to supply their area and for Europeans to supply Turkey.”
There is some market talk that India will still need some import volumes to supplement its requirements, and Asian suppliers are more likely to fill the gap than European suppliers, for reasons of logistics and location.
One supplier suggested that some volumes from Asia could therefore be diverted from other destinations such as Turkey, which would be advantageous for European sellers, who are better placed to serve this area. It said it is better to place volumes locally, taking into account price levels globally and the need to limit the lead time and freight costs where possible.
Turkey is also a preferred location for European suppliers, because they do not pay any import duties unlike exporters from other regions.
Another source, however, said it is still too early to evaluate how the new ADD structure in India imposed on EU players and other countries is likely to play out. It said it remains in a wait-and-see position, but maintains that its export activity during the first quarter and into the early second quarter has been generally satisfactory.