After continuously falling for one month, PVC prices have started moving up in the month of May. PVC prices increased by 1.4% or Rs1/kg on 8th May after rising by Rs1/kg on 2nd May – totalling to a hike of Rs2/kg or 2.8% in May. After suffering a major fall in March and April 2019, PVC prices are still down by Rs1.5/kg since April 2019. However, recent increase in the price has changed the sentiment in the market and PVC pipe manufacturers are seeing a pickup in the volume. With crude prices remaining firm and PVC prices finally showing a trend reversal, the trade expects PVC prices to increase in the near term.
Four price cuts in a span of one month had taken the PVC suppliers and buyers both by surprise. In the month of April itself there were two price cuts and in a span of four weeks, PVC price had fallen by 12%. As dealers expected further cut in the prices they decided to ‘inventory light mode’ which in turn impacted the volume of sales too.
Despite the recent volatility in PVC prices, CPVC prices have remained firm over the last one year which has surprised many people in the market. However, with the recent initiation of anti-dumping investigation concerning cheap imports of CPVC from China/Korea into India, CPVC prices are likely to remain firm in the near term if injury is proven. With the PVC price trend seeing a reversal, the pricing differential between CPVC and PVC pipes would narrow down further, which would augur well for CPVC pipe manufacturers.
In financial year 2018-19, PVC industry grew by just 4.3% as against a CAGR of 7% over the past seven years. According to PVC manufacturers, slower growth of the industry in the last financial year was mainly due to significant slowdown in real estate sector. However, industry people feel that current financial year would be better than previous year.