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[Market Decoding] The Truth Behind the PVC Price War in Southeast Asia: Market Impact of Reliance's New Production Capacity in India
Created on 08.25
From Vietnam to the Philippines, Chinese PVC exporters are facing a "dimension-reducing blow", and an industrial chain restructuring triggered by cost advantages and technological upgrading has quietly begun.
New Production Capacity and Advantages of Reliance
Reliance's Jamnagar plant in India started operation in Q2 2024, with an annual capacity of 3 million tons (accounting for 25% of Southeast Asia's total demand).
In terms of price, India's FOB quotes are $50-80 per ton lower than China's and $30 per ton lower than Southeast Asia's local quotes. In terms of logistics and transportation, the sea freight from India to Indonesia is $15 per ton lower than that from China to Indonesia (benefiting from the two-way Persian Gulf-Malacca route).
Trigger of the Price War: Reliance's "Vertical Integration" Tactic
1. Raw Material Cost Crushing
Relying on ethane supply from its own oil field (KG-D6 gas field), the ethylene cost is 40% lower than that of China's coal-to-olefins.
The electricity price of its own power plant is $0.03/kWh (the average for Chinese PVC enterprises is $0.08/kWh).
2. Technological Dimension-Reducing Blow
Adopting BP's latest suspension process, with a single-line capacity of 600,000 tons per year (China's mainstream is 300,000 tons).
Product ash content is controlled below 0.02% (China's national standard is 0.08%).
Chain Reactions in the Southeast Asian Market
▶ Vietnam
From January to May 2024, the proportion of China's PVC imports in Vietnam dropped sharply from 72% to 58%.
Indian supplies have seized the pipe-grade market by virtue of "15-day payment term + free technical guidance".
▶ Indonesia
Reliance has established a joint venture warehouse with local giant Chandra Asri, shortening the spot delivery cycle to 3 days.
The spot price of PVC in Jakarta has fallen below $900 per ton (China's CIF price needs to be $920).
▶ Philippines
Builders have switched to purchasing Indian SG-5 grade PVC, leading to inventory backlog of China's calcium carbide-based PVC.
Breakthrough Paths for Chinese Enterprises
1. High-End Countermeasure (Taking Wanhua Chemical as an Example)
Medical-grade PVC resin (K value 68-70) has a premium of $200 per ton and is favored by Thai medical device factories.
2. Logistics Restructuring
COSCO Shipping launched the "Qinzhou-Port Klang" express line, shortening the delivery time from South China to Malaysia to 7 days.
3. Policy Tools
Applying for an anti-dumping investigation on Indian PVC (referring to the success rate of the 2023 Egypt case).
Key Observation Points for the Future
Indian Export Tax Rebate: If the government removes PVC from the 5% tax rebate list, the price advantage will narrow.
China's Calcium Carbide Policy: The elimination of plants with an annual capacity of less than 300,000 tons in Inner Mongolia may push up the raw material cost in Northwest China.
Geopolitical Variable: If the toll for the Strait of Malacca increases by 10%, India's cost advantage will be offset.
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