Diwali celebrations might have come to an early end for the plastic manufacturers as the polymer price was once again raised last week, 4th time in the third quarter. Last week PVC price was raised by 6% taking the total price hike in the third quarter to 18%. This comes close on the heels of 19% price hike in the second quarter. The rally, which started with sharp spurts in May 2020 and June 2020, has now extended into Q3FY21 as well. PVC prices, which are now at Rs107.3/kg, have risen 63.7% since 1st May 2020.
The surge has been led largely by continued supply-side issues globally. According to market sources, price may remain firm during rest of the calendar year and the plastic industry may have to wait till new year for some price respite when some closed factories are expected to reopen.
While pipe distributors continue to have leaner channel inventory post Covid outbreak, these sustained price hikes might tempt these distributors to resort to higher channel filling to benefit them from the increasing trend in prices. Strong double digit growth seen in October by the plastic pipe manufacturers may be partly due to restocking by the channel.
While continued price rise of PVC is helping large players to clock inventory gains as they are gradually passing on the price hike to consumers, smaller players are battling raw material unavailability.
Meanwhile, CPVC price which was stable all these months has also started moving up and last month Prince Pipes hiked the price by 3%.