SunSirs: China PVC Prices Rebounded significantly Last Week

According to the monitoring of the commodity market analysis system of SunSirs, last week (7.21-25), the PVC spot market broke away from the weak and volatile market and made efforts to rise, with a strong upward trend. As of Friday, the average price of SG-5 PVC carbide method in the East China market was 5,024 RMB/ton, up 3.87% during the week.

Supply side: Last week, the atmosphere of speculation in the PVC spot market gradually strengthened. Driven by the significant rise in the futures market, the spot market continued to climb. The market performance has improved in terms of supply and demand, and the PVC production rate remained stable last week, maintaining the previous level of production rate. The upward trend 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, but the market is still in the stage of destocking, mainly due to the large amount of basic inventory in the market, and the current spot supply side remains abundant.

Cost side: Last week, the price of calcium carbide in the market mainly fell, and the market entered a bottoming stage. According to the monitoring of Business Society, the weekly decline of calcium carbide was 1.35%. From this, it can be seen that the cost side has not brought any impetus to PVC, and the increase in downstream procurement has a certain stimulating effect, which has led to a rebound trend in PVC prices.

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 the short-term futures market is mainly due to the improvement of market sentiment and the driving force of the futures market, 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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