Fall in the PVC price is seemingly unabated and it has now touched 27 months’ low. Few days ago, price fell by sharp by 4.2% or Rs 3 per kg. This leads to fourth successive price cut in PVC in the last one month. PVC prices now stand corrected by Rs10/kg or 12.6% since 18th March 2020 to Rs69.1/kg. With crude oil price turning negative, which is historic, further fall in PVC prices cannot be ruled out.
With the extension of lockdown, demand for the product has come virtually to nought. However, limited commencement of construction activities in certain areas (from 20th April onwards) may create some demand but that too may not happen immediately. With prices falling continuously, dealers will be forced to sell their stock at huge discount to limit their losses.
With no respite seen in global demand in the near term and likely lower crude oil prices in the near term amid Covid-19 concerns, analysts expect PVC prices to sustain at lower levels at least in the near term.
Interestingly, CPVC prices have remained firm throughout this period and seems to have not affected by the sharp fall in the price of PVC. It may be recalled here that the top CPVC pipe players (excluding ASTRA) had taken a 3-5% price hike in the first week of March 2020.