Prices for commodities like petrochemicals and steel have plunged from highs earlier this year as Chinese producers respond to weakening domestic consumption by turning to export markets.
Imports of Chinese-made polyvinyl chloride into India, the world's largest buyer of PVC, doubled on the year in the April-October period, according to India's Commerce Ministry. This came amid a 10% drop in Chinese investment in domestic property development for the first 11 months of 2022, denting local demand for a material used in construction products and water pipes.
China's excess supply has made its way to India, putting heavy downward pressure on prices. Japanese companies' prices for shipments to India this month have fallen 10% compared with November to around $770 to $800 per tonne, with the median down 56% from the April peak.
This stems from a combination of growing Chinese supply and cooling demand -- amid coronavirus-related lockdowns and economic weakness now extending well beyond the property sector -- that is reminiscent of the conditions that led to the slump in global steel markets in 2015.
