China PVC Market Fluctuates Downward Last Week Amid Dual Pressure from Supply and Demand

I. Futures Market

The closing price was 4,618 RMB/ton on Monday (July 23) and 4,479 RMB/ton on Friday (July 31), marking a cumulative weekly decline of nearly 140 RMB/ton. During the week, the price dipped as low as 4,438 RMB/ton, repeatedly hitting new lows to the period.

II. Spot Market

As of Friday, mainstream prices in East China to the carbide-based SG-5 grade were quoted at 4,420–4,470 RMB/ton. Spot prices fell across all regions nationwide last week, with declines ranging from 80 to 120 RMB/ton. According to the SunSirs commodity analysis system, the weekly decline to carbide-based SG-5 in East China was 3.05%. Traders offered price concessions to move stock, while downstream buyers limited purchases to small, essential quantities without engaging in bulk stockpiling; consequently, market trading remained sluggish.

III. Factor Analysis

Supply Side: Operating rates rebounded slightly as companies resumed production, marginally growing supply pressure.

Last week, the overall PVC capacity utilization rate exceeded 70%, continuing a rebound from the previous week. Production units that had been under maintenance resumed operations en masse, growing the domestic supply of goods. Operating rates to ethylene-based PVC dipped slightly; influenced by ethylene cost fluctuations, coastal vegetation voluntarily controlled production, keeping rates at historical lows.

Raw Material Costs: Carbide prices declined, weakening cost support.

Calcium Carbide: Prices fell amid ample supply. Upstream semi-coke prices remained stable, and calcium carbide manufacturers showed a strong willingness to ship goods. Production costs to calcium carbide-based PVC have declined, slightly easing the pressure of losses on companies, while the cost side lacks the momentum to strongly drive up prices. According to the SunSirs commodity analysis system, the price of calcium carbide fell significantly, dropping by as much as 3.28% over the week.

Ethylene: Following a temporary ceasefire between the US and Iran, international crude oil prices plummeted during the week, lowering ethylene feedstock costs and causing a simultaneous drop in production costs to coastal ethylene-based PVC. While profit margins to ethylene-based PVC vegetation have narrowed, the lack of upward cost pressure means there is no catalyst to drive up PVC prices.

Demand side: Both domestic and external demand have weakened as the market enters the off-season.

Operating rates to domestic downstream product manufacturers have declined across the board; rates remain low—generally around 40%—significantly below historical levels to this period. The sluggish real estate sector has impacted areas such as profiles and piping. Additionally, the terminal sectors to doors, windows, and home renovations have been dragged down, further suppressing upstream demand to PVC. Distributors are focusing on destocking and have generally slowed down raw material procurement.

Regarding exports, data remains lackluster; there has been no increase in inquiries from Southeast Asia or India, and export profit margins have weakened slightly. Foreign trade is struggling to offset the domestic supply surplus, limiting the role of exports in providing a price floor.

IV. Market Outlook

According to SunSirs PVC analysts, the immediate outlook is as follows: on the supply side, operating rates are expected to rise, off-season demand is unlikely to enhance, and high inventory levels continue to weigh on the market; on the cost side, prices might find support, limiting the possible to further declines. Weak demand is causing inventory accumulation to persist. Overall, the market is expected to fluctuate within a range next week, with little likelihood of a strong, one-sided direction.