China PVC Powder Market to Evolve Against Tug-of-War Between Fundamentals and Macro Market
Introduction: On December 9, the press release of the meeting of the Political Bureau of the Communist Party of China Central Committee focused on the economic agenda for 2025. The meeting established a “steady yet progressive” tone for next year’s economic policies and raised the bar for macroeconomic policy management. In 2025, China’s domestic macro policies will likely emphasize “proactive and effective” measures, creating a broadly supportive environment for the commodity market. For the PVC powder market, while the overall sentiment improves, its demand will still be influenced by the real estate market.
In 2025, macroeconomic policies will continue to focus on boosting economic growth momentum and establishing a long-term new development framework. Key areas of focus include “more proactive and effective macroeconomic policies,” “stabilizing the real estate and stock markets, mitigating risks in key areas and external shocks, and stabilizing expectations.”
1. The meeting mentioned a “moderately loose monetary policy,” a phrase last used in 2009. A more favorable macro environment is expected in 2025, benefiting the commodity market, including the PVC powder market.
As a futures product, fundamentals and macro atmospheres can influence the PVC powder market price. Supply-demand fundamentals may remain the major price driver. Macro improvements may provide periodic support and drive temporary price rebounds. However, the policy impact is likely to be phased and requires sustained attention.
2. “Stabilizing the real estate and stock markets, preventing and resolving risks in key sectors and external shocks, stabilizing expectations” can give limited support to the PVC powder market.
The meeting emphasized stabilizing the real estate and stock markets, preventing and resolving risks in key areas and external shocks, stabilizing expectations, stimulating vitality, and promoting the continuous recovery and improvement of the economy. It clearly outlined next year’s requirements for the real estate and securities markets, aligning with the goal mentioned at the September Politburo meeting to promote the stabilization and recovery of the real estate sector. From the perspective of the commodity market, the stabilization and recovery of the domestic real estate market involve the following aspects. Stabilization begins with the recovery of property prices, including increased transactions in new and second-hand housing markets and government purchases of government-subsidized housing. The meeting also mentioned the recovery of revenue and profit growth for real estate-related businesses, which includes reducing corporate debt levels and optimizing business structures. In addition, the recovery of growth in real estate-related building materials industries, including downstream and end-market sectors such as building materials and home decoration industries was mentioned.
50-60% of PVC powder demand is tied to real estate-related sectors. With the property market expected to stabilize in 2025, demand for PVC powder may see support, though the impact may be limited. PVC powder products serve end-use applications later in the property cycle, typically two years post-groundbreaking. As recent policies focus on clearing existing inventory, the boost to PVC powder demand may remain tepid.
3. Positive effects may support the price rebound in the short term, but fundamentals may be the major price driver.
The meeting emphasizes proactive macro policies to expand China’s domestic demand, focusing on boosting economic growth momentum and establishing a long-term new development framework.
For the PVC powder market, the long-term outlook remains positive, but short-term challenges persist. The oversupply situation will likely worsen, despite some macro improvements. Given these dynamics, the 2025 PVC powder market is unlikely to be optimistic. The industry will remain in an adjustment cycle, driven by a supply glut. However, macroeconomic tailwinds may lead to periodic rebounds. Overall, China’s PVC powder prices are expected to hover at lows in 2025, with the annual average price slightly below 2024 levels.
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