According to the monitoring of the commodity market analysis system of SunSirs, the PVC spot market reversed its decline last week (5.12-16), and prices rebounded significantly. As of last Friday, the average price of SG-5 PVC carbide method in China was 4,782 RMB/ton, an increase of 3.87% during the week.

Supply side: Last week, the PVC spot market atmosphere improved, reversing the downward trend since May. On the one hand, driven by the futures market, the spot market has significantly improved and prices have rebounded. On the other hand, the market performance has improved in terms of supply and demand. Last week, the PVC production rate remained stable, and there was no significant increase in supply. The production rate remained at a balanced level, but market transactions have significantly improved. This is mainly based on the increase in trading volume and the improvement of market sentiment.

In terms of inventory, there has been a temporary increase in transaction volume in the market recently, and social inventory continues to decrease. However, considering the previously large basic inventory, the current spot supply side remains abundant.

Cost side: Last week, the price of calcium carbide in the market did not change much, with a slight decline. According to the commodity analysis system of SunSirs, calcium carbide fell slightly by 0.62% this week. The main reason for the high price decline is limited cost support, and the upward trend of PVC prices in this round is mainly driven by supply and demand. Although there is no positive news on the cost side, the increase in downstream procurement volume has a certain stimulating effect, and the upstream and downstream linkage has led to a rebound trend in PVC prices.

The PVC analyst from SunSirs believes that the supply and demand of PVC will remain stable in the short term, and the operating rate of manufacturers is expected to remain stable in the middle and late stages. Although the inventory of enterprises continues to decrease, the process is slow. The rebound of short-term futures market is mainly due to the improvement of market sentiment, and the lack of sustained improvement momentum in PVC fundamentals in the later stage. As downstream procurement returns to rationality, the positive support effect is not significant. We should be cautious about the magnitude of the increase.

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