[PVC Weekly Review] Short-Term Market Gains Unable to Offset Off-Season Drag; Prices Pull Back After Rally

1. This Week’s Market Focus

Production side: This week, PVC plant capacity utilization fell by 0.58% week-on-week, and industry output declined by 0.85% accordingly, with plant maintenance weighing on overall production.

Inventory side: Domestic PVC social inventory stood at 1.2862 million tonnes, up slightly by 0.23% week-on-week and surging 118.45% year-on-year, with the inventory base still at a historically high level.

Order side: Factory presales increased by 2.74% month-on-month, but declined by 8.93% year-on-year, indicating that the short-term recovery in presales does not represent a substantial improvement in end-market restocking.

II. Analysis of the Domestic PVC Market This Week

Domestic PVC spot prices moved in a pattern of rising first and then declining during this period. Throughout the week, concentrated maintenance in the industry continued, leading to a temporary tightening of market supply. In addition, the bullish sentiment in coal and coke strengthened, and the stronger futures market briefly pushed up spot offers. However, end-user demand remained weak, high-price transactions continued to face resistance, and the price increase lacked fundamental support.

Currently, the domestic downstream market has entered the traditional demand off-season, with orders for domestic trade products shrinking. On the foreign trade side, exports have weakened under the dual pressure of the overseas off-season and low-price competition among peers. Overall supply-demand contradictions remain prominent, and the positive impact from futures market movements has proved fleeting, with spot prices falling back again after a brief surge. As of June 4, negotiated spot warehouse-pickup prices for East China calcium carbide-based SG5 were 4,600–4,750 yuan/ton, while mainstream prices for mid- to low-end ethylene-based materials were 4,950–5,150 yuan/ton.

III. Key Focus Areas for the Next Period

Policy and Raw Materials: Closely monitor the implementation of relevant industry regulatory policies and track price fluctuations of raw materials such as ethylene and calcium carbide.

External factors: Geopolitical tensions are disrupting international crude oil trends; pay close attention to changes in ferrous bulk commodities and international shipping freight rates.

Terminal foreign trade: Continuously monitor downstream product operating load, domestic rigid demand procurement rhythm, and PVC export order data.

4. Next Week’s Market Forecast

Overall, next week the PVC spot market will maintain a weak and volatile pattern, with an increase in supply coupled with weak demand during the off-season, making it likely for the market to shift downward.

Supply sideTianjin Bohua, Ningbo Zhenyang, Inner Mongolia Yili, and Dezhou Shihua's facilities are steadily ramping up operations, leading to a slight increase in industry supply. The support from previous maintenance is gradually diminishing.

Demand SideDownstream off-season persists, with product manufacturers operating at low utilization rates. Procurement remains limited to essential needs, and most buyers are adopting a wait-and-see approach, looking to purchase at lower prices. India has entered the monsoon season, coupled with rising समुद्री freight rates, and external demand continues to weaken, so exports are unlikely to improve in the short term. Close attention should be paid to the guidance from July Asian external market contract prices.

Cost sideRaw material trends diverged. On the ethylene side, domestic spot availability for sale has contracted, with spot supply tight in East China and Shandong. Prices for domestic truck-delivered cargoes and USD-denominated cargoes remained stable to slightly stronger. As for calcium carbide, supply from Southwest China continued to be released, with cargoes for external sales flowing into the market. Calcium carbide prices fluctuated downward, further compressing the profit margins of carbide-based PVC. Close attention should be paid to changes in calcium carbide producers’ willingness to restart furnaces going forward.