India's Goverment Proposed Anti-dumping Duty on Chinese Polyvinyl Chloride Flex

The polyvinyl chloride (PVC) goods market of India possibility heave a sigh of relief, with a fall in demand and the consequent fall in prices recently.

Also, prices of leather goods such as upholstery, shoe, luggage, diaries, belts, jean labels and sports goods are likely to become a tad expensive due to the finance ministry's decision to impose anti-dumping duty on imports of PVC flex films from China. Industry sources said imports of raw material PVC, a polymer variant, were free and demand for PVC flex goods was huge.

The Directorate General of Anti-Dumping & Allied Duties, in its final findings, has recommended anti-dumping duty may be imposed on imports of PVC paste, a variant of PVC, especially from China, Russia, Taiwan, Thailand, Korea and Malaysia. However, the finance ministry is yet to take a decision on this.

Given the current scenario, the finance ministry should act upon the recommendation to put anti-dumping duty on PVC resin (raw material) soon, market sources said. "Otherwise, the inverted duty structure may hamper the parent industry badly."

PVC is the third-most-used plastic or polymer petrochemical, after polyethylene and polypropylene. Depending on the manufacturing process or polymerisation, there are two types of PVC. Suspension is plain or rigid PVC, used for construction works, while emulsion or paste PVC is used in coating and blending applications. PVC flex is an end-product, used in tarpaulins, canvas and printing. It is suitable for indoor and outdoor printing, used in billboard, display, banners and exhibition booth decoration and leather goods. The anti-dumping duty has been imposed for five years since July 2010.

Prices of PVC, the primary raw material for PVC films, remain sticky at Rs 55,000-60,000 (basic variety) per metric tonne. Market sources are of the view that there is no point in putting anti-dumping duty on final products, when one can import cheap PVC resin for manufacturing PVC flex films. This will only make things difficult for the entire PVC market in India, since the price fall will continue. On the other hand, industry sources said producers of PVC flex films would get to raise their prices because of great demand and limited manufacturers.