SunSirs: China PVC Market Continues to Rise This Week (March 2-5)

This week (3.2-5), the domestic PVC market continued to show a strong trend, with a significant increase in futures leading to a rise in spot prices. Downstream work gradually resumed and exports rushed to support market sentiment. However, social inventory remains high, and there is still pressure for price increases. According to data from SunSirs, the SG-5 PVC carbide method in East China increased by 3.61% this week, and the current market price is in the range of 4,850-4,900 RMB/ton.

On the supply side, the current operating rate of the PVC industry remains at about 80%, which is generally at a neutral to high level. The operating rate of the calcium carbide method has been slightly reduced, while the ethylene method has slightly increased. Some enterprises have maintenance plans, and the marginal pressure on supply has been alleviated.

On the demand side, the operating rate of downstream pipe and profile enterprises has rebounded to over 60%, and the operating rate of soft products and packaging has also exceeded 60%, gradually releasing the demand for essential goods; Affected by the upcoming cancellation of export tax rebates, there was a rush to sign foreign trade orders in March, which provided certain support to the market.

In terms of inventory, domestic PVC companies have a stock of 504,000 tons, a slight decrease compared to the previous period, but social inventory still reaches a high of 1.353 million tons, which is at a high level in recent years, an increase of 58% year-on-year, and is still an important factor restricting the sustained strengthening of prices.

On the cost side, the price of raw material calcium carbide is running weakly. According to data from SunSirs, the price of calcium carbide has fallen by 0.65% in March, and the cost support for calcium carbide PVC has weakened; The cost of ethylene production is greatly affected by fluctuations in international crude oil and ethylene prices.

Overall, SunSirs believes that, in the short term, PVC has shown strong performance driven by the strengthening of crude oil, downstream resumption of work, export rush, and partial maintenance. However, the pattern of high inventory and supply exceeding demand has not changed, and it is expected that the future market will mainly be volatile, with limited sustained upward momentum.

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