PVC Prices Decline in October, May Stabilize at Bottom Later

October 31st, according to reports

I. Price Trends

According to the commodity market analysis system, in October, the Chinese PVC spot market continued the downward trend from the previous two months, with prices continuing to fluctuate and decline, and the price decrease generally slowed down. As of October 30, the average price of PVC in China was 4,570 CNY per ton, with a monthly price drop of 1.80%.

2. Market Analysis

This month, the PVC spot market in China maintained a weak trend. Under the influence of supply and demand pressures, prices fell continuously throughout the month. Near the end of the month, PVC prices clearly stabilized, with a slight rebound, but the price increase was very limited.

Overall, the domestic PVC spot market in October was generally weak. Specifically, on one hand, the cost support was insufficient, as upstream crude oil and ethylene prices declined, and calcium carbide feedstock was also negatively affected by the drop in calcium carbide prices. Coupled with the repeated weak fluctuations in the futures market, the spot market followed the trend, fluctuating downward. On the other hand, the supply and demand pressure was evident, with social inventory remaining at a medium to high level. In terms of supply and demand, PVC manufacturers' operating rates remained high, and production continued to increase, keeping the market in a state of oversupply. The market is currently in a continuous destocking process, and there are signals of bottoming out and stabilizing. Downstream purchases were mainly based on fixed-price orders, with low enthusiasm for inquiries and purchases, resulting in a lackluster market atmosphere. The listing prices were relatively low. Overall, the market was still driven by rigid demand, with moderate trading activity. As of October 31, the mainstream price range for China's SG5 type calcium carbide-based PVC was around 4600-4700 CNY/ton.

In the upstream calcium carbide sector, since October, the price of calcium carbide has turned to a decline, and the price decrease is significant. According to the monitored data, the price decrease of calcium carbide in October was 2.61%. Due to weak cost factors and the suppression from supply and demand, the PVC market showed no improvement.

III. Market Forecast

PVC analysts believe that in the short term, the supply and demand pattern for PVC will not change much, mainly because the operating rates of manufacturers remain stable, and both enterprise inventories and market inventories are high. The market is still in the inventory clearance phase, and considering that prices are gradually stabilizing at the end of the month, there may be room for a rebound in the future.