This week (10.26-30), the domestic PVC market fluctuated and rose, with the focus of spot prices rising, and the futures market following the energy and chemical sector’s upward trend; The core contradiction is the passive production reduction and continuous destocking caused by losses, which forms a bottom support. However, downstream terminal demand recovery is weak, making it difficult to drive a trend upward trend. The linkage between futures and cash is fluctuating, and there is insufficient follow-up on high priced transactions, resulting in a strong wait-and-see sentiment in the market.
1、 Performance of spot and futures markets
On the spot side, the mainstream electric stone method SG-5 warehouse withdrawal spot exchange in East China and Shandong gradually increased from 5000-5050 yuan/ton this week. The mainstream trading range over the weekend was 5200-5250 yuan/ton, and traders followed suit by raising prices by 100-200 yuan/ton. The manufacturer’s quotation was firm, but the actual transactions were mainly small orders for essential needs, and the resistance to high price transactions was relatively high. The price of ethylene based materials is higher than that of carbide based materials, and the price difference is maintained. Due to greater losses, there is a shortage of circulating materials. According to the Commodity Analysis System of Shengyi Society, the SG-5 weekly increase of East China Dianshi Method was 4.03%.
Futures end: The PVC contract on the Dalian Commodity Exchange follows the volatility of the spot range, which is temporarily boosted by the expectation of production reduction, but the demand expectation is weak, the upward height is limited, and the basis fluctuation is not significant.
2、 Trend analysis: Supply contraction outweighs weak demand
Supply side: Industry starts at a low level, driven by losses, passively reducing burdens
This week, the PVC industry as a whole maintained a relatively low level of production, with an overall load of around 60%, which is in the low range of the year. Calcium carbide method PVC: Outsourcing calcium carbide enterprises continue to suffer losses, and integrated enterprises rely on supporting calcium carbide and caustic soda to reduce costs, but also actively control loads; Partial equipment will continue to undergo periodic maintenance and load reduction, and the resumption period will be extended. Enterprises will control production and reduce output in exchange for price.
Only about 50% of the ethylene production has started, resulting in severe losses. Most of the purchased ethylene plants have been shut down for a long time, and the willingness to resume production is extremely low, becoming an important source of supply reduction. The maintenance losses this week remain high, and the reduction in production is a passive behavior under cost inversion, rather than an active joint price increase by the enterprise. If the raw materials fall and profits recover in the future, there will be elasticity for resuming production.
Overall, the contraction of supply this week is not due to active production control and price protection, but rather a passive supply reduction caused by cost inversion, which is a bottom support factor, but lacks strong positive effects of active concentration and price support.
Cost side: There is support at the bottom, but insufficient upward drive
The quotations in the upstream calcium carbide production areas remain relatively stable, supported by the costs of blue charcoal and coal. Calcium carbide has slightly rebounded, with a slight increase of 0.4% this week according to data from Shengyi Society. Establish a solid cost bottom line for PVC produced by calcium carbide method; International crude oil is fluctuating at a high level due to the geopolitical risks in the Middle East, which has driven the price of ethylene to be strong. The cost pressure of ethylene based PVC continues to exist, which also limits the significant downward space for PVC spot prices. The biggest feature of the cost side this week is that there is a bottom line, but there is insufficient upward momentum, and there is no sustained significant upward trend in the raw material side.
On the demand side: The peak season delivery falls short of expectations, and downstream low load demand is being met immediately

Downstream pipe and profile construction has been slow to increase, while terminal real estate construction has been sluggish, with investment generally lower than the same period in history; The orders of the product factory are mainly short orders and urgent needs for replenishment. After the price increases, downstream resistance has risen, and the willingness to chase inventory is weak. They generally use and purchase as needed, and dare not stock up. Soft products, sheets, flooring materials, and other downstream products also have limited improvement, resulting in poor order transmission.
In terms of exports, the early stocking in India brought about a temporary rebound in inquiries, but after the cancellation of export tax rebates, the price advantage of domestic sources weakened, and external demand was only slightly diverted, which could not reverse the weak domestic pattern. Downstream markets generally adopt a ‘buy as you go’ model, and once the market rapidly rises, procurement immediately contracts, which significantly suppresses prices.
This week, PVC manufacturers and social inventory have shown a double high trend, and the process of destocking is slow. There is currently no sign of rapid or significant destocking in the market. Traders tend to control their inventory and focus on light positions to follow the market trend. They are unwilling to stock up in large quantities, and inventory pressure is only marginally relieved without substantial clearance.
3、 Future prospects
Short term PVC is likely to continue its consolidation pattern, supported by sustained low production, destocking, and cost bottom; The biggest limitation above is still the weak terminal orders in the real estate chain and insufficient downstream willingness to replenish inventory.
Overall, there may be limited room for PVC prices to rise in the short term, with a focus on maintaining a high consolidation trend.