Bullish And Bearish Forces Intertwined, PVC Remains In Range-Bound Pattern

Data Source: JLC

Supply-side dynamics show clear structural divergence. Calcium carbide-based producers, benefiting from relatively stable raw material costs, have seen decent profit recovery and maintain high production enthusiasm, resulting in persistently high operating rates. In contrast, ethylene-based producers face mounting cost pressures due to elevated ethylene prices, leading to worsening losses and forcing them to reduce operating loads and cut production, thus driving their operating rates steadily lower. Nevertheless, owing to the substantial existing capacity base, market supply remains ample. Meanwhile, domesticPVCAlthough social inventory is gradually being drawn down, the pace remains slow and the overall level remains high, persistently constraining the room for price recovery and becoming a key drag on the market.

The overall demand side is weak, with core domestic demand recovery falling short of expectations. The slow recovery of the domestic real estate industry has directly led to a sluggish recovery in pipes, profiles, and other materials.PVCCore downstream products operate with insufficient capacity, making it difficult to increase the load of terminal industries, and the release of essential demand is limited. Downstream companies are cautious in their purchasing mindset, showing strong resistance to high raw material prices, and mostly adopt a small-order, on-demand replenishment model, resulting in sluggish market transactions.

In terms of cost and market sentiment, the emotional premium of crude oil and chemical products caused by earlier geopolitical conflicts is gradually fading, and the market speculation atmosphere is cooling down.PVCFutures and spot prices have rationally corrected in tandem, with market trends fully reverting to supply-demand fundamentals. Calcium carbide prices remain firm at elevated levels, supporting the calcium carbide-based route.PVCProviding bottom support; although the ethylene price has dropped, it remains at a high level, and ethylene-based enterprises continue to incur losses, further limiting their operational flexibility.

2026 5Month, domesticPVCThe market is likely to maintain a range-bound fluctuation, with the volatility range potentially narrowing. The supply side will welcome the peak season for spring maintenance, leading to a further decline in the industry's operating rate, and a sequential easing of supply pressure. However, the slow reduction of high social inventory will continue to suppress the space for price rebound. On the demand side, the situation of weak domestic demand recovery and relatively stable exports persists, with insufficient terminal orders and cautious procurement, which is unlikely to see significant improvement. Although the price of ethylene, the cost side, has declined, it remains at a high level, and the loss of ethylene-based enterprises continues, providing clear cost support. The sentiment in the external market is tending to stabilize, and after the premium from geopolitical tensions fades, the market returns to the fundamentals. The futures market is experiencing narrow fluctuations, offering a neutral guidance for the spot market.

Overall,5 PVCThe market will still be in a tug-of-war between high inventory, weak demand, and expectations of supply contraction. If maintenance is fully implemented and inventory reduction accelerates, there might be a slim chance for a modest rebound in the market. However, the room for a rebound is limited, and it's hard to see a trend of overall increase. Moving forward, it's crucial to closely monitor the progress of spring maintenance, the pace of inventory reduction in society, and the marginal changes in real estate and export demands, to seize the opportunities in the market's short-term fluctuations.