PVC Prices Decline After the Holiday; Short-Term Recovery Likely to Be Difficult

February 28 news

In the first week after the holiday (Feb. 24-28), PVC market prices in China declined. According to the commodity analysis system, the weekly price decrease for PVC produced via the calcium carbide method SG-5 was 2.3%. As the weekend approached, the mainstream transaction prices for SG-5 produced via the calcium carbide method in Shandong region ranged from 4,600 to 4,700 CNY per ton.

At the beginning of the week, the PVC market atmosphere was light. Downstream processing enterprises gradually resumed production, and dealers returned to the market, with terminal demand still in the recovery phase. The market was characterized by a strong wait-and-see sentiment, with dealers mainly maintaining stable and low quotations. The industry is waiting for clearer trends after the holiday. On the supply side, post-holiday PVC manufacturers maintained a relatively high operating rate, increasing the supply. As logistics and transportation gradually recovered, the high inventory levels at upstream factories began to shift to the market and terminal channels, increasing the circulation of spot goods.

External demand has been mediocre, with exports falling short of expectations, mainly due to the anticipated cancellation of export tax rebates and fluctuations in ocean freight costs. This has led to a lack of follow-through on foreign trade orders, and high-priced goods are facing significant transaction constraints, making it difficult to provide effective support to the market. Under the triple pressure of high supply, weak demand, and weak exports, the PVC spot market lacks sustained upward momentum, and prices are under pressure.

As the weekend approaches, PVC market prices have been declining steadily, while the futures market has shown volatile and weakening trends. Some traders are proactively offering discounts to boost sales. With a slight increase in demand from essential buyers, market transactions have improved slightly compared to the beginning of the week; however, overall, the market still remains trapped in a weak fundamental outlook.

Overall, the current core contradictions in the PVC market in China are concentrated in high supply, slow demand recovery, and export pressure. In the short term, prices will mainly fluctuate, and it is necessary to closely monitor the resumption progress of downstream operations, the pace of upstream inventory depletion, and changes in export orders.

Future Market Forecast

The PVC market price is expected to continue its weak trend next week. On the supply side, PVC plants in China are likely to see a slight decline in operating rates next week, as some companies have maintenance schedules planned. However, the industry’s overall utilization rate remains relatively high. Coupled with persistently high social inventories, supply-demand imbalances in the market will continue to put downward pressure on prices.

On the demand side, although downstream enterprises in China have gradually resumed operations, the operating rate may recover slowly later on. There is still a temporary rigid demand, but the overall purchasing attitude is cautious, mainly focusing on replenishing stocks at low prices and following up as needed, which makes it difficult to provide strong support to the market. In terms of costs, the raw material calcium carbide market is performing poorly, further weakening the cost support for PVC, and lacking upward momentum.

Overall, under the influence of three factors—high inventory, weak demand, and weakening cost support—the Chinese PVC market lacks positive drivers for next week, and it is expected to continue a weak downward trend.