India delays new PVC quality control requirements to Dec. 24

India's Ministry of Chemicals and Fertilizers has delayed the official implementation of its quality controls on polyvinyl chloride homopolymers imports by four months to Dec. 24, according to a government order issued in the Gazette of India on Aug. 23.

The government announced in February that all suppliers intending to ship PVC into India must be certified by the Bureau of Indian Standards. The policy was originally set to take effect Aug. 26, but the Department of Chemicals and Petrochemicals pushed back the effective date likely in a bid to buy more time to award certificates to more firms, sources said.

The delay was expected by many market participants, with sources saying it was necessary to prevent a PVC supply crunch in the country.

"We do not have enough domestic supply to meet our PVC demand, and many suppliers [have] yet to receive the BIS certification," a South Asian trade source.

Impact on Asian PVC exporters

India's polyvinyl chloride imports stood at 3.1 million metric tons in 2023, up 40% year on year, according to Indian Customs data. China, the region's largest PVC exporter, accounted for around 40% of India's 2023 PVC imports.

The implementation of BIS norms could thus change PVC trade flows, as Chinese producers were last heard either having not applied for or unable to secure the BIS certification.

Industry sources said the application process for Chinese exporters might not be as smooth as for their other Northeast Asian counterparts, given political tensions between the countries and a previous influx of Chinese materials that was seen to be subduing Indian PVC values.

Over 40 companies have applied so far, with BIS certifying exporters from South Korea, Taiwan and Thailand, sources said.

Asian initial offers for September's cargoes were also reportedly hinging upon the outcome of this long-awaited announcement, where market participants are now firmer than ever in their beliefs that Asian PVC prices will be driven down.

"[Taiwanese majors' September] fresh offers will plunge tomorrow, there's finally something going on with the PVC market," a China-based trade source said.

Other market participants found that the delay in BIS certification implementation could drive down initial offers as it necessarily provides Chinese exporters more time to export cargoes into India in a bid to maximize sales, thereby buoying regional supply and exerting downward pressure on prices.

"There will soon be temporary anti-dumping duties," the Chinese trade source added.

PVC prices in India have dropped significantly in recent weeks due to normalizing freight rates and sluggish demand during the ongoing monsoon season.

The Platts-assessed CFR India PVC price was stable in the week to Aug. 21 amid unchanged market fundamentals, following a $20/t drop a week before that had dragged the PVC India rate to a three-month low.

Meanwhile, the CFR China PVC price plunged $55/t week on week to $740/t at the Aug. 21 Asian close, reflecting bearish market fundamentals and China's weak property sector.

Platts is part of S&P Global Commodity Insights.