Peak Season Momentum Fades; China PVC Prices Retreat from Highs

I. Price Trends

Spot Market (SG-5 Carbide-based)

Mainstream ex-warehouse prices (cash payment) in East China: 4,780–4,860 RMB/ton. In the Linyi, Shandong market, prices fell by a cumulative 100–200 RMB/ton over the week, easing slightly to 4,700–4,750 RMB/ton by the weekend.

Ethylene-based PVC: 5,350–5,500 RMB/ton; prices showed greater resilience against declines, supported by ethylene feedstock costs.

Futures Market

The main PVC contract on the Dalian Commodity Exchange (DCE) underwent continuous corrections throughout the week. The earlier policy-driven rebound retreated as futures prices tracked the weakening spot market. The basis narrowed slightly, and bullish confidence waned; the market is currently characterized by weak, fluctuating trends.

II. direction Analysis

Supply Side: Resumption of Some Maintenance Units; Operating Rates Rise Slightly

Some production units that had previously undergone maintenance resumed operations this week. Manufacturers such as Inner Mongolia Junzheng, Formosa Plastics (Ningbo), and Dezhou Shihua generally increased their operating loads. With few new maintenance shutdowns, the sector operating rate rose to nearly 70%, though this remains low compared to the same period in recent years.

However, both carbide-based and ethylene-based companies are currently generally operating at a loss—with ethylene-based producers facing particularly significant losses. These losses have dampened the willingness of companies to actively ramp up production, limiting the recovery in operating rates and making it difficult to sustain high price levels. If prices continue to fall, the possibility remains that some companies might once again cut production or minimize operating loads to support prices. Demand Side: The "Golden September" peak season has underperformed, failing to sustain high price levels.

Regarding downstream demand, operating rates at plastic product manufacturers have risen slightly—with the overall downstream operating rate climbing to just over 40%—marking a modest month-on-month improvement however remaining significantly below levels seen in peak seasons of previous years. Real estate remains the primary drag; the completion of real estate projects has had limited impact on downstream demand. Pipe and profile manufacturers have not seen a significant surge in new orders, with purchasing largely limited to immediate needs rather than inventory stockpiling. Furthermore, absolute inventory levels remain high, the pace of destocking is slow, and inventory pressure has not yet been substantially alleviated.

Exports: While overseas shipping rates have risen and international quotes have strengthened, actual buying interest from abroad remains limited. Consequently, export development is constrained and insufficient to offset domestic market pressures.

Cost Side: Calcium Carbide: Prices to coal and semi-coke remain high, providing strong cost support to calcium carbide. However, as PVC selling prices fall below the cost line, the calcium carbide production route continues to incur losses; this acts as a firm floor to spot prices, limiting the scope to a sharp decline. According to the SunSirs commodity analysis system, while calcium carbide prices remain high, they are showing a downward direction, having dipped 0.74% this week.

Ethylene Route: International crude oil prices are fluctuating at high levels, keeping ethylene feedstock costs elevated. Losses to ethylene-based producers have widened further, suppressing operating rates to this production route.

III. Market Outlook

SunSirs PVC analysts believe that PVC prices will continue to fluctuate within a weak range in the short term. The market faces numerous bearish factors: supply is expected to recover, and operating rates might rise further. Additionally, terminal demand remains weak—with limited improvement in real estate-related demand—and downstream buyers are purchasing cautiously. High inventory levels still need to be digested, and bearish sentiment in the futures market is weighing on spot prices. Therefore, PVC prices are expected to remain weak in the near term.