SunSirs: China PVC Supply and Demand Pressure Increases in October, with Prices Rising first and then Falling

https://www.chemnet.com   Nov 01,2024 SunSirs

According to the monitoring of the commodity market analysis system of SunSirs, the PVC spot market first rose and then fell this month, and the price continued to rise in the first ten days. After the National Day holiday, the market started and the price rose significantly. Subsequently, the market fell back from a high level, and at the end of the month, the market slightly rebounded. According to the commodity analysis system of SunSirs, as of the end of the month, the average price of SG-5 PVC carbide method in China was 5,338 RMB/ton, with a monthly increase of 1.60%.

Supply side: In the first week after the holiday, due to the improved market environment, the stock and futures markets rose in tandem, PVC futures rose, and the domestic spot market generally followed suit. But the good times didn't last long. Due to the lack of fundamental support in the market, the supply and demand structure did not improve significantly. In the middle of the month, when there was a reversal in the futures market, spot prices naturally fell. In October, the operating rate of manufacturers generally increased, with over half of them running at full capacity. Market shipment pressure has increased, and dealer offers have continued to decline. 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. The market experienced narrow fluctuations in the latter half of the year, with prices rebounding slightly, but the consolidation range was relatively narrow.

In terms of inventory, PVC inventory remained relatively high in October, and the process of de stocking was slow. As the end of the month approaches, there is a phase of high transaction volume in the market, and social inventory has slightly decreased. However, considering the previously large basic inventory, the current spot supply side remains abundant.

On the cost side: In October, the calcium carbide market continued its upward trend from the previous month, with prices reaching a new high. According to monitoring by Business Society, the monthly increase in calcium carbide prices was 7.4%. Although the price of calcium carbide continues to rise and the cost of PVC has significantly increased, the cost aspect has not played a strong role due to the pressure of PVC supply and demand. As of the end of the month, the domestic quotation range for PVC SG5 electrical aggregate is mostly around 5,150-5,350 RMB/ton.

The PVC analyst from SunSirs believes that the supply and demand contradiction of PVC is difficult to resolve in the short term, and the operating rate of manufacturers remains high, with both enterprise inventory and market inventory being high. On the cost side, the upstream price of calcium carbide is unlikely to continue its upward trend, and the cost support is average. From the perspective of the futures market, the PVC futures market has shown weak performance in the later stage, which has affected the confidence of the spot market, and the spot market is generally bearish. It is expected that the PVC spot market will remain weak and volatile in the short term, and we will closely monitor changes in the news.

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