Anti-dumping duty likely on CPVC resins

Anti-dumping duty likely on CPVC resins

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With the government expected to take steps on anti-dumping duty on CPVC resin/compound imported from China and Korea in the near term, CPVC prices are expected to move further upwards in the coming weeks. It should be noted that the CPVC prices have already witnessed a price hike of 3-4% in July 2019 and if the government imposes ADD, the price may move further up in the coming days.

Domestic demand for CPVC is close to 0.12-0.14MT and 25% of CPVC resin is sourced from China/Korea at significantly lower prices. In India, there are only two domestic manufacturers of CPVC ― DCW and Chemplast ― and both have complained about dumping of resins by these countries and have asked for an anti-dumping duty levied on CPVC imported from China/Korea. The duty, if levied, would hurt unorganized/small players as the price would go up in the market. According to estimates, nearly unorganised sector is likely to lose 30% of the market share due to this move which will be grabbed by the players in the organised segment.

It should be noted that the CVPC pipe in India had been growing at a faster rate than the existing plastic pipe system. Further, in order to encourage the sector, the Government of India (GOI) has been placing orders for sewage, water supplies and plumbing pipes.

Further, production of CPVC piping industry requires huge investment in technology and expertise making it difficult for players to enter into this segment. As a result, this provides huge opportunities to the existing players to increase their market share and revenue in replacement as well as new construction.

On the polymer price front, polymer prices have moved further up by 2% last week due to weakening of rupee. After rising by Rs5.8/kg or 8% since 1st May 2019, PVC prices declined by Rs2/kg or 2.5% two weeks back. However, with sharp rupee depreciation over the past fortnight, PVC prices stage a sudden reversal with consecutive price hikes of Rs1.5/kg or 2% each.