In a big relief to irrigation and plumbing sectors, falling trend in PVC prices continued in June also. With effect from 1st June, PVC prices have declined by a further Rs 5/kg, or 3.7%, to Rs 130.3/kg. This is the second decline in the last 15 days.
It may be recalled here that in one of the longest rallies in the PVC prices which had extended to the fourth quarter of FY21 had defied all forecasts made by the experts. PVC prices had doubled since 1st May 2020 in less than a year much to the discomfort of builders and farmers. The surge has been largely led by sustained supply-side issues globally with US cold wave leading to the shutdown of plants in January-February.
However, after an increase of Rs 19/kg, or 16.2%, in Q4FY21, PVC prices reversed their trend in the current financial year by falling 4.4% in the first quarter so far. In fact, PVC prices have fallen by 6.5% from the peak of Rs 139.3/kg in May 2021. While the price surge in FY21 was led largely by sustained supply-side issues globally amid intermittent domestic lockdowns, the recent fall is essentially a result of expected imports of calcium carbide based PVC from China in the near term along with correction in global prices.
With the two successive declines in the prices of PVC in a fortnight, PVC pipe manufacturers are now slightly worried about the prospects of the industry in the near term as the falling price may discourage the dealers to stock up the products fearing further fall in the prices.