PVC Market Crashes: Prices Plummet 15%, Costs Fall 17%, Companies' Profits in Jeopardy!

A price war! Slump in demand! Polyvinyl chloride (PVC) prices hit a new annual low! Since the beginning of June, the domestic PVC market price has shown a unilateral downward trend and continued to refresh the annual low point. The price changes are as follows: in Northwest China, the factory price of PVC SG-5 enterprises in Yihua, Qinghai was reduced by 120 yuan/ton. In Central China, the price of PVC SG-5 in Yihua, Hubei was also decreased. North China: Tangshan Sanyou PVC SG-8, SG-5, SG-3 prices have been reduced by 100 yuan/ton. As of September 10, the mainstream price of SG-5 fell to 5270 yuan/ton, down 930 yuan/ton from the high point in June, a decline of 15.00%, and a new low. On the cost side, prices fell by 17%.

The production cost of PVC is mainly affected by the fluctuation of raw material prices. Recently, calcium carbide prices have shown a high downward trend, which is related to the centralized maintenance of PVC manufacturers and the increase in market supply. The decline in the price of calcium carbide has directly reduced the production cost of PVC, but it has also compressed the profit margin of PVC enterprises. As of the end of August, the cost of calcium carbide polyvinyl chloride enterprises fell by 17.05% compared with the same period last year, which partly promoted the downward price of polyvinyl chloride.

Although September is usually the traditional peak season, the operating rate of downstream products enterprises has not seen significant improvement, new orders are limited, and the willingness to stock is low. The downstream operating rate remained at a low level, with a total operating rate of 48.93% in August, a decrease of 3.81% from the previous month and a decrease of 3.18% year-on-year. Due to the downturn in the real estate market, the orders and operating rates of hard products companies have declined, and the operating rates of pipe and profile companies are lower, at 44.69% and 41.84%, respectively.

Affected by the downstream demand off-season, enterprise orders have decreased, and the continuous decline in PVC prices has exacerbated market pessimism, and the increase in enterprise shipment pressure has squeezed the profitability of the industry, making it decline. Since 2024, the price of PVC has been in a downward trend, the gross profit of the enterprise has not got rid of the negative range, and the negative profit continues to this day. Taking the purchased calcium carbide method as an example, the national average gross profit in 2024 hovers around -100 to -800 yuan/ton.