SunSirs: China PVC Market Reverses, Oscillates and Declines in August

According to the monitoring of the commodity market analysis system of SunSirs, the domestic PVC spot market did not continue the upward trend of the previous month in August, and the market fluctuated and fell. As of August 29th, the average price of PVC in China was 4,676 RMB/ton, a decrease of 2.83% for the whole month.

In the first half of this month, the PVC spot market maintained a range of fluctuations, with prices rising and falling. In the second half, the negative impact of supply and demand fundamentals led to a reversal of PVC prices and further deepening of the decline.

Specifically, on the one hand, there is insufficient cost support, which is affected by weak upstream crude oil and ethylene. Combined with the suppression of the futures market, the futures market has been fluctuating weakly, while spot prices have followed the market trend and fluctuated downward. On the other hand, there is a certain pressure on supply and demand, and the spot market has not yet escaped the downward channel. On the supply and demand side, the operating rate remains high, production continues to increase, and there is a slight oversupply. At present, there is no signal of bottoming out and stabilizing in the market. Downstream procurement is mainly based on spot prices, with low enthusiasm for inquiry based procurement and a sluggish market atmosphere. The hanging order price is relatively low. Overall, it is still mainly driven by basic needs, and the trading atmosphere is average. As of August 29th, the mainstream price range for PVC SG5 electrical aggregate in China is mostly around 4,700-4,800 RMB/ton.

In terms of upstream calcium carbide, since August, the price of calcium carbide has continued the weak and volatile trend of the previous two months. According to data monitored by SunSirs, the price of calcium carbide fell by 0.28% in August. Overall, calcium carbide lacks positive guidance and has limited support. With the weak performance of downstream PVC market, the price of calcium carbide may not stabilize and improve in the near future.

The PVC analyst from SunSirs believes that the supply and demand of PVC will continue to remain weak in the short term, mainly due to the sustained high operating rates of manufacturers and the high inventory levels of both enterprises and the market. There is also an impact of policy uncertainty in the medium and long term. The PVC pressure is still relatively high in the later stage. It is expected that PVC prices will remain weak in the short term.

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