PVC suppliers greeted the new year with another price hike, seventh one in last three months. PVC price was hiked by Rs 4/kg, or 3.4%, w.e.f. 1st January. This is the first price hike in the fourth quarter which follows six successive hikes in the third quarter. Thus, in last three months, PVC price has gone up by Rs 30/kg or 33%. Remember, PVC price was increased by Rs 14.5/kg, or 18.9% in the second quarter.
The rally, which started with sharp spurt in May 2020 and June 2020, has now extended to the fourth quarter as well. PVC prices are now at Rs 121.3/kg, showing an increase of 85% since 1st May 2020.
The surge has been led largely by continued supply-side issues globally. The market was expecting the price to cool down in the new year and was surprised to see the uptrend continuing in the fourth quarter as well.
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.
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. This has helped the leading players in the organised sector to gain market share at the expense of smaller and marginal players in the unorganised sector.