On July 21, domestic SG5 PVC spot prices saw a slight rebound driven by geopolitical sentiment, even as market fundamentals remained weak. Regional price differentials were shaped by the interplay of production routes (feedstock types) and logistics costs. In East China—the nation's core distribution hub—mainstream ex-warehouse spot prices ranged from 4,460 to 4,600 RMB /ton. South China, a key consumption region, saw stable quotes of 4,600–4,650 RMB /ton, reflecting a premium for long-distance transport. Ex-factory prices in the North China and Shandong production regions remained lower, with transactions primarily occurring in the 4,440–4,570 RMB /ton range. The structure of circulating supply varied by region: calcium carbide-based PVC dominated inland circulation, while ethylene-based supply was relatively abundant in coastal areas. Regarding inventory, the entire industry chain entered a slow destocking phase; total national social inventory of PVC stood at 1.0409 million tons, a decrease of 15,700 tons from the previous reporting period. Specifically, sampled warehouses in East China reduced stocks by 14,600 tons, and South China saw a slight decline, while upstream producer inventories fell by 24,900 tons. Although the pressure from high accumulated inventory—which had persisted for months—was slightly alleviated, overall inventory levels remained high for the year. Traders generally maintained low inventory positions, stocking only small amounts to meet immediate demand rather than actively stockpiling.

Supply-side dynamics showed a clear divergence based on production routes. The national comprehensive operating rate for PVC was 64.74%, a slight month-on-month decline. Maintenance and load reductions at calcium carbide-based plants were the primary drivers of this supply contraction; the operating rate for this route fell by 3.14 percentage points as multiple inland integrated plants reduced loads due to rising upstream calcium carbide prices and persistent losses. Conversely, coastal ethylene-based production lines benefited from a drop in international ethylene prices, which slightly eased cost pressures; their operating rate rose by 5.24 percentage points, leading to an increase in regional supply. Upstream calcium carbide producers have simultaneously scaled back output, pushing the industry's overall operating rate down to 62.61%. The mainstream transaction price in Wuhai rose by 25 RMB/ton week-on-week to 2,350 RMB /ton; meanwhile, prices for semi-coke (blue carbon) feedstock remained stable. Rising cost floors have further squeezed profit margins for calcium carbide-based PVC production; integrated plants in the Northwest are facing losses approaching RMB1,000 per ton, while producers relying on purchased calcium carbide face even steeper losses. Ethylene-based PVC producers in East China are also seeing slight losses, and the price spread between the two production methods has widened to RMB 2,522, highlighting a growing structural cost disparity within the industry.

Domestic end-user demand remains generally lackluster. Operating rates for downstream pipe and profile manufacturers saw only marginal increases—reaching 31.2% and 39.13% respectively—levels that remain far below historical norms for this time of year. Outdoor construction has been hampered by high temperatures and the rainy season, and the recovery in real estate completions remains weak; consequently, manufacturers of finished products report low order volumes and are maintaining an extremely conservative procurement stance. While demand for niche segments like flexible films and medical-grade products has seen a slight rebound, their limited share of total consumption is insufficient to offset the drag caused by sluggish demand for rigid products. Export quotes have risen in tandem with domestic spot prices, leading to a "wait-and-see" attitude among overseas buyers and subdued transaction volumes; the export momentum seen in the first half of the year is fading as emerging overseas markets enter their rainy seasons, causing a contraction in demand for building material feedstocks.

Comprehensive customs data for the first half of the year reveals a "high-start, low-finish" trend for the year's domestic and foreign trade. Cumulative exports of domestic PVC resin totaled 2.3881 million tons from January to June 2026—a year-on-year increase of 21.82%—with the growth concentrated in the first quarter, driven largely by a rush of orders ahead of the April cancellation of export tax rebates. India remained the top export destination, purchasing 904,500 tons from China during the period. However, monthly exports fell sharply in June; the implementation of the tax rebate policy, combined with the overseas off-season, has caused the export boom to gradually subside. Imports have continued to contract sharply; the cumulative import volume for the first half of the year was only 74,900 tonnes—a year-on-year drop of nearly 40%. Overseas ethylene-based PVC has lost its cost competitiveness as domestic self-sufficiency improves, with only small quantities of high-end modified PVC products still being imported; consequently, the impact of overseas supply on the domestic market continues to wane. Globally, chemical plants in Europe and the US are operating at low capacity due to high energy costs, causing overseas PVC FOB prices to rise in tandem with crude oil fluctuations and highlighting the cost-effectiveness of domestic products. However, new capacity coming online in South Asia is gradually diverting export orders; overseas demand can only absorb domestic surplus inventory intermittently and fails to provide a sustained, strong pull.

Price transmission between upstream and downstream sectors has created a chain of mutual constraints. Upstream calcium carbide prices are supported by production limits at plants, driving up costs and providing a floor for calcium carbide-based PVC prices. Meanwhile, fluctuations in international crude oil drive ethylene price volatility, causing the costs of coastal ethylene-based PVC to adjust in line with global energy markets; this divergence in cost trends between the two production methods has widened regional spot price spreads. Midstream PVC is pressured by high inventories and weak demand, making it difficult to pass raw material cost increases downstream and squeezing processing margins. Downstream pipe and profile manufacturers, constrained by insufficient real estate orders and slow finished-product shipments, are strictly controlling raw material procurement costs. This has resulted in a "weak balance" transmission structure characterized by slightly strengthening raw material prices, passive price increases for finished goods, and stagnant terminal demand. Demand for soft films and specialty modified PVC remains relatively stable, lending greater price resilience to the corresponding PVC grades and widening price spreads across product categories.

Short-term market rebounds are driven primarily by sentiment regarding geopolitical events; the core fundamentals—domestic real estate off-season, high inventory levels, and low downstream operating rates—remain unchanged. A tug-of-war persists between the cost floor provided by calcium carbide and weak terminal demand. Key factors to watch moving forward include the pace of inventory destocking, the timing of traditional autumn/winter restocking by downstream sectors, and changes in overseas export orders. Barring major new geopolitical developments, PVC spot prices are likely to fluctuate within a range; a sustained upward trend lacks the necessary demand support, and the market is unlikely to see a substantial recovery until traditional downstream demand picks up seasonally.

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