India’s primary producers always claim the dumping of sub-standard Chinese goods into local markets at competitive prices, which in turn takes away the market share of high-quality raw materials from domestic producers and pulls down the quality of final products in circulation. Polyvinyl chloride (PVC) is one such product that has seen a sharp increase in imports into India from China during the financial year 2022-23.
Industry sources said that India’s PVC imports from China have tripled to 645,000 tonnes in the financial year 2022-23 compared to 209,000 tonnes reported in the previous year. With this, China’s share in India’s PVC import market has more than doubled to 33 percent this year compared to 15 percent last year. Apart from PVC, China has supplied a huge quantity of other polymers such as low-density polyethylene (LDPE), for which an anti-dumping duty (ADD) is being worked out.
| Country-wise share in India’s 1.96 MTPA PVC imports |
| Country | Absolute import quantity (‘000 tonnes) | Share in India’s overall import (%) |
| 2021-22 | 2022-23 | 2021-22 | 2022-23 |
| Japan | 280 | 304 | 20 | 16 |
| Taiwan | 259 | 304 | 18 | 16 |
| China | 209 | 645 | 15 | 33 |
| South Korea | 175 | 160 | 12 | 8 |
| USA | 6 | 152 | 0 | 7 |
| Thailand | 95 | 109 | 7 | 6 |
| Indonesia | 48 | 57 | 3 | 3 |
| Vietnam | 37 | 28 | 3 | 1 |
| Others | 318 | 201 | 22 | 10 |
| Total | 1,427 | 1,960 | 100 | 100 |
Source: Industry
According to an industry report, China has captured a substantial portion of the market share of Japan, Taiwan, and South Korea in India’s overall volume of imports. This means that Indian PVC importers have diverted a large number of purchase orders to China from Japan, Taiwan, and South Korea in the financial year 2022-23. The report further states that India’s PVC imports from the United States also jumped to 152,000 tonnes, capturing 7 percent of India’s market share in the financial year 2022-23, compared to a mere 6,000 tonnes or almost ‘zero percent share.
Rising consumer demand pushes imports
The PVC demand in India was badly impacted during the last two pandemic years. Construction activities halted due to the shortage of labour and working capital. The government imposed periodic lockdowns that disrupted public movement and retail trade of finished products. Transportation of both raw materials and end-products remained staggered and disturbed. As a consequence, PVC consumption in India plunged to an estimated 2.8 million tonnes in the financial year 2021-22 but recovered to 3.7 million tonnes in the financial year 2022-23. However, India’s PVC supply from domestic sources continued to remain at 1.6 million tonnes for the last several years.
Due to rising demand and stagnant supply, India needed to procure it from overseas, of which China proved to be the largest supplier by replacing existing exporters. Suspension grade contributes to nearly 95 percent of India’s overall PVC demand.
| India’s PVC demand-supply (million tonnes) |
| Financial year | Domestic demand | Total capacity | Operating rate (%) |
| 2021-22 (a) | 2.8 | 1.6 | 89 |
| 2022-23 (p) | 3.7 | 1.6 | 90 |
| 2023-24 (f) | 4.0 | 1.6 | 89 |
| 2024-25 (f) | 4.3 | 1.7 | 90 |
| 2025-26 (f) | 4.6 | 2.0 | 88 |
| 2026-27 (f) | 4.9 | 3.0 | 77 |
| 2027-28 (f) | 5.2 | 3.5 | 75 |
| 2028-29 (f) | 5.6 | 3.5 | 83 |
| 2029-30 (f) | 6.0 | 4.0 | 81 |
Source: Industry; a = Actual, p = Projection, f = Forecast
After two years of pandemic-induced breakdown, India’s PVC import rose by a staggering 37 percent to 1.96 million tonnes in the financial year 2022-23, as against 1.42 million tonnes in the previous year. The report further states that India’s dependence on imported PVC will continue in the future due to the lack of investment from domestic or international players in this sector.
The data further read that India’s overall PVC production capacity will increase by 400,000 tonnes to 2 million tonnes in the next four years i.e. by the financial year 2025-26 from the current output capacity of 1.6 million tonnes. By then, India’s PVC demand would increase by over 24 percent. The report further forecasts that India will be able to see another 2 million tonnes of PVC production capacity, which will go up to 4 million tonnes by 2029-30. Against this backdrop, India’s PVC demand will rise to 6 million tonnes by the end of this decade.
Weak demand in exporting countries
Both China and the United States have witnessed a slowdown in factory activity, a decline in housing sales, and a high unemployment rate, resulting in a slump in their economies. Weakening demand from the domestic sector of China and the United States has prompted manufacturers to push for sales in fast-developing economies such as India. Fortunately, India has continued to absorb surplus materials globally as consumption remains strong.
| Global PVC supply and demand scenario (million tonnes) |
| Calendar year | Total demand | Total capacity | Operating rate (%) |
| 2021 (a) | 48.5 | 58.9 | 82.3 |
| 2022 (p) | 46.8 | 59.8 | 78.7 |
| 2023 (f) | 47.6 | 62.1 | 76.6 |
| 2024 (f) | 49.5 | 63.6 | 77.9 |
| 2025 (f) | 51.6 | 65.6 | 78.6 |
| 2026 (f) | 53.4 | 67.1 | 79.7 |
| 2027 (f) | 55.2 | 67.8 | 81.4 |
| 2028 (f) | 56.8 | 68.6 | 82.9 |
| 2029 (f) | 58.4 | 71.1 | 82.2 |
| 2030 (f) | 59.9 | 72.8 | 82.3 |
Source: Industry; a = Actual, p = Projection, f = Forecast
India’s PVC industry had shown a decline in the previous two years due to Covid-19 and supply disruptions. The factors responsible for the strong rebound in PVC consumption are affordable price level, improved construction and infrastructure activities, better availability of resin, the government’s Jal Jeevan Mission, and higher income for farmers.
Significance of China’s PVC industry
China contributes nearly half of global PVC demand. According to a report, China’s PVC demand was estimated at 22.3 million tonnes in 2022, which is six times higher than India’s reported demand of 3.7 million tonnes in the financial year 2022-23. Against a cumulative capacity of 59.8 million tonnes, global PVC consumption was estimated at 46.8 million tonnes in the calendar year 2022, with North East Asia, North America, and Europe together accounting for about 71 percent. Overall, global PVC demand growth is estimated at 2-3 percent in the next five years.
| PVC-End segment landscape – India (%) |
| Particulars | 2021-22 | 2022-23 |
| Pipes | 74 | 75 |
| Wire and Cable (W&C) | 7 | 7 |
| Fittings | 6 | 5 |
| Calendering | 6 | 6 |
| Profiles | 3 | 3 |
| Films | 1 | 1 |
| Sheets | 1 | 1 |
| Others | 2 | 2 |
Source: Industry
China has emerged as the largest PVC player over the years with significant investments in capacity additions. The country has strategized to become the largest PVC producer and supply of plastic raw materials to the world. According to reports, China contributed 60 percent to the global additions in 2022 and is set to account for 80 percent in 2023. Since PVC production is capital-intensive, creating fresh capacity and becoming self-reliant may be a long-term dream for India.
| Global-India latest PVC-end segment landscape (%) |
| Particulars | Global – Calendar 2022 | India FY 2022-23 |
| Pipes and Fittings | 43 | 80 |
| Profiles | 19 | 3 |
| Films and Sheets | 17 | 2 |
| Wire and Cable (W&C) | 8 | 7 |
| Floorings | 3 | - |
| Calendering | - | 6 |
| Others | 10 | 2 |
Source: Industry
Conclusion
India’s gross domestic product (GDP) is poised to leapfrog from the current US$3.2 trillion in 2022 to US$32.8 trillion by 2047. Such significant economic growth is expected to support the government’s public welfare plans, such as infrastructure, water supply, modern agriculture, and healthcare, where PVC finds widespread application. India will continue to be an outlier in the global scenario with an estimated 6-7 percent growth in demand in the next few years and will continue to rely on imports despite increased focus on recycling and the circular economy.
DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com
