SunSirs: China PVC Reverses Decline, Price Rebounds at Bottom

https://www.chemnet.com   Sep 29,2024 SunSirs

According to the monitoring of the commodity market analysis system of SunSirs, the PVC spot market reversed its decline this week (9.23-27), with prices rebounding at the bottom. As of Friday, the average price of SG-5 PVC carbide method in China was 5,190 RMB/ton, an increase of 1.25% during the week.

Supply side: The PVC spot market has performed strongly this week, reversing the previous decline. Driven by the futures market, the spot market has been climbing steadily this week. The market performance has improved in terms of supply and demand, and the PVC operating rate has remained stable this week. Enterprises that had previously reduced their operating costs have also taken action to increase their operating costs, resulting in a slight increase in operating rates. This is mainly based on the increase in trading volume and the improvement of market sentiment.

In terms of inventory, there has been a temporary increase in transaction volume in the market 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: This week, the market price of calcium carbide has also rebounded, with a weekly increase of 2.53% according to monitoring by Business Society. The increase in downstream procurement volume after the holiday has a certain stimulating effect, and the upstream and downstream linkage has led to a rebound trend in PVC prices. As of now, the quotation range for PVC SG5 electrical aggregate in China is mostly around 5250-5380 RMB/ton.

PVC analysts from the business community believe that the PVC supply is still sufficient in the short term. The operating rate of manufacturers is generally higher than that before the Mid Autumn Festival this week. Although the inventory of enterprises has been depleted, the process is slow. The rebound of short-term futures market is mainly due to the emotional improvement brought by the introduction of stimulus measures, and the lack of sustained improvement momentum in PVC fundamentals. With the downstream facing the weakening impact of holiday construction, the positive support effect is not obvious. We should be cautious about the magnitude of the increase.

PVC analysts from the business community believe that the PVC supply is still sufficient in the short term. The operating rate of manufacturers is generally higher than that before the Mid Autumn Festival this week. Although the inventory of enterprises has been depleted, the process is slow. The rebound of short-term futures market is mainly due to the emotional improvement brought by the introduction of stimulus measures, and the lack of sustained improvement momentum in PVC fundamentals. With the downstream facing the weakening impact of holiday construction, the positive support effect is not obvious. We should be cautious about the magnitude of the increase.

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