Future Growth Potential of CPVC Amidst Warm Demand

Key Takeaways:

• PVC and CPVC Prices: CPVC prices range from ₹1,32,000 to ₹1,36,000 per MT, while PVC prices vary between ₹73,000 and ₹82,500 per MT across different regions in India.
• Capacity Expansion: DCW Limited plans to increase CPVC production capacity to 50,000 MT by FY26 to meet growing demand.
• Global Polymer Market Updates: Maintenance work at Braskem’s PVC plants in Brazil, and steady prices for ethylene and naphtha in Asian markets.
• Polymer Market Outlook: Despite bearish market trends, growing CPVC demand for water piping and industrial applications may drive future growth.

Polymer Price: CPVC and PVC Price Overview

• The current market prices for various CPVC and PVC materials are as follows: SHANDONG GAOXIN CPVC K57 is priced at ₹1,36,000 per MT in Mundra, while SUN EIGHT CPVC K67 is available for ₹1,32,000 per MT in the same location.
• In terms of PVC, ASNYL PVC K57 Ready Material is priced at ₹82,500 per MT in Mundra, and DAGU K PVC K67 Ready Material is offered at ₹73,000 per MT in Bhiwandi. Additionally, LG PVC K67 Compounded is available in Mundra for ₹76,250 per MT.

Polymer Demand and Supply

• The CPVC market is projected to see completion by FY26, with an initial capacity increase of 20,000 MT expected to come online in the latter half of Q2 FY26, followed by an additional 10,000 MT by the end of FY26. This expansion is driven by the rising demand for CPVC, which is commonly utilized in hot and cold water pipes, as well as in industrial liquid handling applications.

• DCW plans to invest up to ₹140 crore in this expansion, with funding sourced from bank loans and internal accruals. The increased capacity will take advantage of DCW's existing infrastructure, potentially resulting in cost savings and operational stability by incorporating its own Suspension PVC (S-PVC) as a raw material.

Polymer News and Market Update

• DCW Limited is set to expand its Chlorinated Polyvinyl Chloride (CPVC) production capacity significantly, Following a board meeting on October 17, 2024. The Company announced plans to boost its capacity by 30,000 Metric Tonnes (MT), bringing the total from 20,000 MT to 50,000 MT.
• Braskem has shut its No.1 and No.2 Polyvinyl Chloride (PVC) Plants for maintenance work. The Plants are located in Maceio, Alagoas, Brazil.
• The European Central Bank (ECB) cuts the key interest rates by 25 basis points to 3.25% as inflation in the eurozone is cooling faster than expected.
• Naphtha Prices assessed stable at US$ 670/- per MT CFR Japan basis.
• Ethylene Prices assessed stable at US$ 840/- per MT CFR NE Asia and US$ 955/- per MT CFR SE Asia basis.

Expert Insights on Future Polymer Market

It is expected that, despite current market conditions marked by tepid demand and sufficient supplies leading to persistently bearish prices, the rising demand for CPVC in hot and cold water pipes and industrial liquid handling applications will eventually drive market growth.