India's Ministry of Commerce and Industry (MCI) has recommended restrictions on polyvinyl chloride (PVC) imports with residual vinyl chloride monomer (RVCM) content above 2 parts per million (ppm) from China, Taiwan, the US and Russia.
The MCI began investigations on 15 July last year after Indian PVC producers raised concerns about possible dumping, affecting domestic markets. These were mainly driven by increased imports of carbide-based PVC from China. These cargoes were priced much lower than traditional ethylene-based PVC cargoes that have a RVCM content equal to or below 2ppm.
The more attractively priced carbide-based PVC cargoes from China attracted considerable buying interest from Indian buyers, as they were like substitutes in most applications. Indian buyers were snapping up these cargoes in the first and second quarters of last year. This posed a challenge for smaller size Indian PVC producers that saw their margins squeezed. These producers faced a challenge as they did not have economies of scale and so faced higher production costs than larger size PVC producers.
The MCI investigated PVC imports between January 2019 and June 2022 with most of its investigations focused on the first half of the year. This is typically when Indian PVC demand is highest as agricultural activity is at its peak. The agricultural sector accounts for 40pc of pipe demand in India, according to market participants. Argus on 12 May assessed PVC pipe at $800-830/t cfr India.
The MCI's investigations found that imports of PVC with a RVCM content of more that 2ppm rose by almost 15pc from the previous year in the first half of 2022. This were also more than double compared with the first half of 2020. But imports of PVC cargoes with RVCM content of 2ppm or less fell by 12pc from a year earlier between January-June 2022. Because of this the MCI concluded that imports of PVC with a RVCM content above 2ppm increased in absolute terms.
The MCI did not find any instance of dumping despite the increased imports of these cargoes and lower price points. It was likely because production costs of carbide PVC were lower than that of ethylene-based PVC.
Participants are now waiting to see if Indian authorities will implement the MCI's recommendation.
| Proposed India PVC import quota restrictions (t) | ||||
| 1Q | 2Q | 3Q | 4Q | |
| Total | 54,204 | 54,920 | 55,646 | 56,382 |
| Imports from China | 20,494 | 20,765 | 21,039 | 21,317 |
| Imports from Taiwan | 15,100 | 15,299 | 15,502 | 15,707 |
| Imports from the US | 9,690 | 9,818 | 9,948 | 10,079 |
| Imports from Russia | 8,920 | 9,038 | 9,157 | 9,279 |
| Source: MCI | ||||
