SunSirs: China PVC Market Prices Continued to Rise Last Week (June 16-20)

According to the monitoring of the commodity market analysis system of SunSirs, the PVC spot market continued its upward trend last week (June 16-20) and continued to climb last week. As of last Friday, the average price of SG-5 PVC carbide method in China was 4,677 RMB/ton, an increase of 1.23% during the week.

Supply side: Last week, the atmosphere of speculation in the PVC spot market gradually strengthened, and last week, driven by the crude oil and futures markets, the spot market continued to climb. The market performance has improved in terms of supply and demand. Last week, the PVC production rate remained stable, with most enterprises operating at high loads and the production rate maintaining the previous level. This is mainly based on the increase in trading volume and the improvement of market sentiment.

In terms of inventory, the market has maintained a high trading volume recently, and social inventory continues to decrease. However, considering the previously large basic inventory, the current spot supply side remains abundant.

On the cost side: Last week, the market price of calcium carbide fell slightly, and the market entered a bottoming stage. According to the monitoring of Business Society, the weekly decline of calcium carbide was 0.68%. The increase in downstream procurement volume has a certain stimulating effect, and PVC prices have rebounded.

The PVC analyst from SunSirs believes that in the short term, there will be sufficient PVC supply, and the operating rate of manufacturers will remain at a high level. The inventory of enterprises is still generally high, and it needs to be continuously reduced in the later stage. The rebound of short-term futures market is mainly driven by the improvement of market sentiment and the rise in crude oil prices driven by geopolitical tensions, and the lack of sustained improvement in PVC fundamentals. 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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