Taiwanese Giant's Price Adjustment Causes Turbulence in India's PVC Market as Prices Fall Below $690/Ton Threshold

In mid-November, a major PVC company in Taiwan, China, took the lead in adjusting prices—announcing a decrease of $40 per ton for December contract benchmark prices, followed by an additional reduction of $60 per ton for November contract prices. This move directly triggered significant fluctuations in the Indian PVC market.Previously, most market participants generally expected a price adjustment of only $10-20 per ton. This unexpected significant price reduction not only completely reshaped market expectations but also highlighted the extreme fragility of current market sentiment.

Traders revealed that the supplier had previously targeted the Indian market.CIF (Cost, Insurance, and Freight)The benchmark price once hit a low of $690 per ton. Based on the principle of cost parity, most industry insiders once believed that this price floor was impossible to break.New offer of $660 per tonNot only did it completely reverse the market pricing situation, but it also significantly enhanced the bargaining power of the purchasers.

Unexpected price cuts may stimulate procurement recovery.

Due to this impact, the CIF price range for PVC in India, as reported by ChemOrbis Plastic Price Weekly,Simultaneous downward exploration at both ends by 30-40 USD/ton.The latest range has fallen to USD 630-660/ton (CIF India), with the upper limit corresponding to quotes from Taiwan, and the lower limit representing prices from mainland China. According to ChemOrbis Price Index, the current quotes have approached the low of USD 640/ton set during the COVID-19 pandemic in May 2020. This price fluctuation essentially reflects the sellers' aggressive pricing strategy under the dual pressure of sluggish demand and abundant supply.

A Mumbai trader admitted that the market sentiment reversed faster than expected: "We did not anticipate such a significant reduction in the benchmark price." He expects that the lower prices may stimulate a recovery in purchasing demand, and the quota for December shipments to India by the Taiwanese giant is likely to be fully absorbed by buyers.

However, he remains cautious about the subsequent price trend: "I believe the market will not continue to decline, as low prices will prompt buyers to enter the market and bottom-fish." However, he also pointed out that the continuous impact of supplies from mainland China remains a "Sword of Damocles" hanging over the market. "The landed price of supplies from mainland China has dropped to $630 per ton, and whether it will further decline in the future, no one can provide a definitive answer at present."

Another Mumbai trader focused on the changing dynamics of market competition: "This price reduction has completely altered the bargaining logic. Buyers are more confident and adopt a stronger stance during negotiations; meanwhile, sellers are forced to bear the pressure and have to adjust prices to match market levels. The price adjustment by the Taiwanese giant has set a price benchmark that cannot be ignored by its peers."

Low prices show attractiveness, downstream awaits replenishment.

A local trader in Delhi analyzes from a downstream perspective: "Although downstream processing companies remain cautious, the current low prices are indeed very attractive. Especially pipe manufacturers are planning to secure supplies while prices are low." He believes that this price drop is likely to trigger a wave of speculative purchases, but there is still a lack of confidence within the industry about the final market stabilization price.

He also mentioned the price differentiation of sources from different regions: "South Korean sources are unlikely to follow suit and reduce prices to the same level, as local producers will not accept offers below 'production cost + reasonable profit.' However, Japanese sources benefiting from tax exemption may have downward potential in their quotes, possibly falling below the current CIF India range of $740-750 per ton." Currently, the CIF India price range for Japanese sources subject to tariffs is $690-700 per ton.

Taiwanese Giant Adjusts Prices to Defend Market Share in India

Another Mumbai trader analyzed that the price adjustment by the Taiwanese giant was a passive response: "Their move is aimed at resisting the aggressive pricing impact from mainland Chinese sources to maintain their market share. Currently, the CIF price of mainland Chinese sources at $630 per ton is an open market fact, and their inventory continues to rise. For this giant, the strategic importance of the Indian market is crucial—losing it would be an unimaginable cost."

At the same time, policy adjustments have further intensified market pressure. The repeal of the Quality Control Order by the Bureau of Indian Standards (BIS) has significantly reduced the compliance costs for imports; meanwhile, the proposed anti-dumping duties are likely to be canceled, ensuring smooth and unobstructed import channels. Coupled with the current weak domestic demand in India, these factors together pave the way for low-priced goods to flood into the Indian market.

From a global perspective,Oversupply remains the core factor suppressing market sentiment.The severe oversupply in the Chinese mainland market is forcing a large amount of goods to flow to export markets, while the continued weak demand in Southeast Asia further exacerbates the pressure on global goods distribution. As a major global PVC consumption market, India naturally becomes the focus of competition for various sources, which also intensifies the competition in the low-end market.

The benchmark price of $660 per ton has reached a historically rare low since ChemOrbis began tracking PVC prices. In terms of short-term price trends, this new benchmark may serve as an anchor for market quotes, while compressing the price spread between different sources. Some sellers may choose to follow suit with price reductions to defend their market share; however, some sellers (such as Korean producers), given high costs or limited duty advantages, are likely to opt for price maintenance to protect their profits.

Can the market experience a genuine stabilization and rebound?

The interplay between weak demand and ample supply, especially the impact of supplies from mainland China, remains a key variable in determining the subsequent market direction. If speculative purchases stimulated by low prices are realized as expected, and the December quota of Taiwanese giants is quickly absorbed, market sentiment is likely to stabilize around the current price level. Conversely, if low-priced sources from mainland China and other Asian countries continue to flow in, the low-end prices of the Indian PVC market will still face downward pressure.

The $40/ton price reduction by the Taiwanese giant not only transformed the market's originally expected minor adjustment into a clear signal of market weakness, but also completely rewrote the competitive landscape of the Indian PVC market. Amidst the triple pressures of weak demand, lowered import barriers, and global oversupply, the Indian PVC market still faces a challenging path to find a true and sustainable price bottom.