Everbright futures: PVC Supply High-Level Fluctuation

On Thursday, the PVC market in East China saw some price adjustments, with the acetylene-based grade 5 material priced at 4720-4850 RMB/ton, and the ethylene material's mainstream reference at around 4900-5050 RMB/ton; the PVC market in North China remained stable, with the acetylene-based grade 5 material's mainstream reference at around 4660-4820 RMB/ton, and the ethylene material's mainstream reference at 4840-4980 RMB/ton; the PVC market in South China saw price range consolidation, with the acetylene-based grade 5 material's mainstream reference at around 4850-4900 RMB/ton, and the ethylene material's mainstream quotation at 4920-5020 RMB/ton.

In terms of demand, domestic real estate construction has stabilized and rebounded, but remains weak compared to the previous year. Therefore, while there is an expectation for an increase in the operating rates of pipes and profiles, the growth is not substantial.

Overall, supply remains high and fluctuating, domestic demand is slowly recovering, and exports are expected to weaken due to India's anti-dumping policies.

Recently, the absolute values of the basis and monthly spread have remained relatively high, with refinery inventories rapidly shifting to the market and a significant increase in warehouse receipts. Overall inventory pressure remains substantial, but this part of the fundamentals should have already been priced in. The current market is re-trading the "anti-involution" narrative, with previous short positions realizing profits. It is expected that PVC prices will see a short-term rebound, but the upside will be limited.