PVC Under Pressure in August, Unlikely to See a "Golden September"

The domestic PVC spot market fundamentals remain stable. Although supply has decreased due to maintenance, the release of new production capacity has kept PVC supply at a high level. It is estimated that PVC production in August will continue to increase, with Longzhong data forecasting a month-on-month increase of 4.07% in domestic production in August. However, demand remains sluggish, with downstream operating rates showing no significant improvement for the time being, and procurement enthusiasm for raw PVC is weak. Exports are affected by India's anti-dumping duties, leading foreign buyers to remain on the sidelines. As a result, the PVC market continues to operate in a weak pattern.

1. PVC under pressure in August, previous highs difficult to surpass.

In August, the domestic PVC spot market experienced a weak and volatile trend. Although favorable policy news continued to emerge in August, the stimulus from policies in industries such as real estate was insufficient, resulting in a stalemate in the PVC supply and demand fundamentals. In September, the quoted prices from major producers in the Asian region were lower than expected, putting pressure on export price competition. As of now, the cash warehouse prices for calcium carbide-based Type V PVC in East China range from 4,720 to 4,850 yuan per ton, while ethylene-based PVC ranges from 4,850 to 5,100 yuan per ton.

2. PVC operating rates remained high in August, and supply is expected to continue increasing.

The estimated production in August 2025 reaches 2.0863 million tons, which is an increase of 4.07% compared to July 2025 and an increase of 7.76% compared to the same period last year. The mass production of Fujian Wanhua's 500,000-ton facility in August, along with fewer maintenance activities in the first half of August, has led to an overall increase in capacity utilization, resulting in a month-on-month increase in production. Entering September, the new production capacities totaling 900,000 tons from Gansu Yaowang, Qingdao Haiwan, and Bohua Development will be introduced to the market, and it is expected that domestic PVC production in September will continue to remain at a high level.

3. Downstream demand remains sluggish and shows little sign of improvement.

The traditional off-season is coming to an end, but downstream operations remain generally at a low level. As of August 22, 2025, the operating rate of domestic PVC pipe sample enterprises was 33.61%, an increase of 0.65% compared to the previous period, but a decrease of 11.70% year-on-year. The ongoing slump in the real estate industry continues to drag down PVC demand, with pipes representing the traditional main demand for PVC, and their operating rates remain low. Coupled with the high impact in the south, construction progress is hindered, and order volumes for downstream product manufacturers are limited. Operating rates continued to decline during the week.

Currently, the operating rates of profile enterprises remain low during the off-season, and there is little change in orders. Judging from the domestic real estate market, there is little sign of improvement in the doors, windows, and profile markets. The domestic profile market continues to experience both intense competition and substitution, with demand remaining in a competitive and shrinking pattern. Overall, growth in the domestic profile market is focused on exports and the development of special-shaped profiles.

Currently, exports are mainly focused on delivery. Foreign buyers are inquiring at low prices, with transaction prices tending to be low, and high-priced deals facing significant resistance. Some have shown a rush to export. As of now, FOB main port prices are quoted at $620-625 per ton. In the Asian region, some pre-sale prices for September PVC shipments have been raised by $30 per ton, with CIF India at $760 per ton, other regions up by $10 per ton, CFR main ports in mainland China at $710 per ton, and CIF Southeast Asia at $725 per ton. Although prices have increased, there is no boost for the Chinese market. Chinese supplies, combined with anti-dumping duties and shipping costs, have no price advantage in the Indian market, and the flow towards the Indian market is expected to decline significantly in the future.

4. The prices of raw materials for both processes remain strong, leading to stronger cost support.

The domestic calcium carbide prices continue to rise, with the mainstream trade prices in Wuhai and Ningxia regions increasing by 50 yuan/ton to 2350 yuan/ton today. Production enterprises are smoothly dispatching their products. As downstream PVC maintenance gradually concludes, the impact of integrated calcium carbide on the market is diminishing. Recently, there has been an increase in maintenance of market facilities, leading to greater instability in supply. It is expected that in the short term, the ex-factory trade prices of the calcium carbide market will remain stable with a wait-and-see attitude, and regional follow-up increases may occur downstream. In the ethylene market: the anticipated release of new production capacity may be postponed again, and in August, the available supply from holders is limited, benefiting the market from the supply side. Regarding the current supply-demand situation, spot prices in the East China region may continue to be strong, with the transaction range expected to be around 7100-7200 yuan/ton; the dollar market is expected to range between 820-840 USD/ton. Both types of process raw materials are showing resilience, with strong support from the cost side.

Overall, in September, the pre-sale quotations of PVC producers in Asia were raised, but the increase was lower than expected. Domestic export price competition for the Indian market intensified, and due to the impact of anti-dumping policies, market customers exhibited increased wait-and-see sentiment. The domestic spot market fundamentals remained unchanged; upstream supply stayed high, and domestic demand did not improve despite the approaching traditional peak season. Short-term operating rates in some industries in North China slightly weakened, and inventory pressure in the market increased. However, the rise in cost prices strengthened the support at the bottom. It is expected that the market will mainly experience weak range-bound fluctuations in the short term. The forecast for the East China region's electric arc furnace carbide method five-type spot price is in the range of 4700-4850 yuan/ton.