Overall, this round of PVC rebound is a phasic recovery driven by the resonance of multiple external positive factors, rather than a reversal of fundamentals. In the short term, constrained by high inventories and weak demand, the market is expected to fluctuate; in the medium to long term, supported by policy bottom-up and cost backing, the clear bottom recovery trend indicates that overall market opportunities outweigh risks.

From a short-term fundamental perspective, the current rebound of PVC is a restorative market driven by sentiment and costs, with no substantial improvement in the supply-demand pattern and lacking the momentum for a sustained unilateral price increase. From a medium to long-term perspective, the current valuation of PVC is at a low level, with limited room for price decline, and the overall market is still in the stage of bottoming out.

Recently, the domestic PVC market has seen a phased sharp rebound in prices, reversing the previous weak and volatile trend. Both futures and spot prices have risen simultaneously, and market trading sentiment has warmed up significantly. This round of PVC price rebound is not driven by a single factor but by the resonance of multiple positive factors, including the recovery of policy expectations, the increase in raw material costs, and the overall tight supply of the chemical industry. However, from the perspective of the core market fundamentals, there has been no substantial improvement in the industry's supply and demand pattern, the sustainability of the short-term market trend is limited, and it is still in a bottoming-out stage in the medium to long term.

The sharp rebound in PVC prices this round is mainly driven by three key factors together, and the superposition of multiple positive factors has completely reversed the market's previous pessimism.

First, the positive real estate policies have repaired market expectations and boosted the overall sentiment of the sector. On August 28th, three departments jointly issued new regulations in the real estate sector, specifically optimizing real estate control policies, which effectively alleviated market concerns about the real estate industry. As a core supporting raw material for real estate, PVC is widely used in construction fields such as pipes, profiles, and doors and windows. The prosperity of the real estate industry directly determines the upper limit of PVC's terminal demand. After the implementation of the policies, market expectations for the subsequent recovery of real estate completion and decoration supporting demand have risen sharply, and funds have actively flowed back into the PVC sector, driving a rapid recovery in the market trend.

Second, the upward price of upstream raw materials provides solid cost support for PVC. The mainstream production process of PVC is the calcium carbide method, and the price trend of calcium carbide directly dominates the production cost of PVC. Recently, the coal market has shown a tight supply and demand balance. The strong downstream industrial demand coupled with the tightened industry supply has pushed the spot coal price to continue rising. As the core raw material for calcium carbide production, the rise in coal prices directly increases the costs of calcium carbide manufacturers, leading to a continuous upward movement in calcium carbide prices. The continuous increase on the cost side compresses the profit margin of the PVC industry, forcing spot prices to follow suit and providing solid fundamental support for the current round of PVC rebound, effectively holding the bottom price range.

Finally, the escalation of the geopolitical situation in the Middle East has triggered an overall rise in the chemical sector. Recently, the navigation of the Strait of Hormuz has been hindered, the progress of the recovery of the international chemical raw material supply chain is not as expected, and the market trading logic has shifted from the traditional fluctuation of crude oil prices to the global shortage of chemical sources. Affected by this, the domestic petrochemical sector has generally strengthened. As an important basic chemical product, PVC has started a rebound trend following the general trend of the industry. The sector linkage effect has further amplified the price increase, driving the rapid recovery of the market situation.

From the perspective of short-term fundamentals, the current round of PVC rebound is a restorative market driven by sentiment and costs. The supply and demand pattern has not seen substantial improvement, and the market lacks the momentum for a sustained unilateral rally. At present, the domestic PVC spot market still maintains a high inventory pattern. The inventory destocking speed of enterprises and traders is slow, and the inventory pressure continues to suppress the upside space of spot prices. Meanwhile, overall demand from downstream end-users is weak. The pace of resumption of work and production in the real estate sector is moderate, and the release of demand for home decoration and infrastructure supporting facilities is below expectations. Downstream plastic product enterprises purchase on demand and prepare goods cautiously, and the overall market trading atmosphere is lackluster. Under the pattern of weak supply and weak demand, the contradiction between market supply and demand is not prominent, which cannot support the price to stage a sustained unilateral rally. The short-term market trend is likely to maintain a range-bound movement.

Combining the short-term and medium-to-long-term market trends, we can clarify the differentiated operation ideas. In the short term, the bullish drivers in the PVC market are gradually being digested, the fundamental weaknesses are prominent, the momentum for market rebound is fading, the unilateral upward or downward trend is difficult to continue, and the risk of market operations is high. It is recommended to adopt a wait-and-see approach to avoid the risks of range fluctuations. From a medium-to-long-term perspective, the current valuation of PVC is at a low level. With the subsequent continuous implementation of real estate policies, the gradual recovery of terminal demand, and the sustained cost support from upstream, there is limited room for price declines, and the overall market is still in a bottoming-out stage. In the follow-up, we can wait for the market to rebound and stabilize, and then seize the opportunity of the medium-to-long-term recovery market at the right time.

Overall, this round of PVC rebound is a phasic recovery driven by the resonance of multiple external positive factors, rather than a reversal of fundamentals. In the short term, constrained by high inventories and weak demand, the market will trend sideways; in the medium to long term, supported by policy bottom-up and cost backing, the clear bottom recovery trend is established, and the overall market presents more opportunities than risks.

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