China PVC Powder Prices to Fluctuate Upward in Sep
Preface: At the beginning of September, China’s PVC spot prices continued to increase, while futures prices nearly reached an annual high. First, as more positive real estate industry-related policies were implemented, there were expectations for demand improvement. Second, in July and August, the PVC export market was fairish, easing the inventory pressure on producers notably. PVC futures prices climbed, followed by increased spot prices.
China’s PVC market prices moved up boosted by declined social inventory and increased futures prices.
Up to September 8, PVC powder overall sample inventory in East China was 358.4kt, down 0.75% from September 1, but up 17.05% Y-O-Y, while that in South China was 48.6kt, down 1.62% from September 1, but up 14.62% Y-O-Y. PVC powder overall sample inventory in South and East China was 407kt, down 0.85% from September 1 but up 16.75% Y-O-Y. Some PVC powder producers still had export orders to be delivered, while export orders at a couple of ethylene-based PVC powder enterprises improved. Downstream enterprises purchased on a need-to basis. On the whole, the PVC inventory inched down.
Taking SG-5 in Changzhou as an example, PVC powder prices saw an upward from mid-August. Up to September 7, the mainstream price of SG-5 in East China was RMB 6,380/mt, up 6.51% from mid-August. With the PVC powder price rising, downstream enterprises purchased on a need-to basis. Affected by tepid orders at downstream enterprises, they mainly engaged in bargain-hunting.
China’s domestic positive policies about the real estate industry propped up the market sentiment, boosting the PVC powder market.
Entering August, there were a couple of positive policies. China’s central bank reduced the loan interest rate. Risk prevention policies were optimized to help local governments resolve their debt risks swiftly. Various localities in China have been exploring region-specific approaches to push urban village renovations to better meet people’s demands for a better life and improve public services. In addition, the principle of “buying houses for living in rather than property speculation” was adhered to. China’s mortgage policy was optimized further such as lower mortgage rates on existing loans. Moreover, regardless of their previous home mortgage history, as long as members of families (including borrowers, spouses and minor children) applying for housing loans do not own any apartment or home in the city, they should be treated as first-time homebuyers during their home loan application process. More than half of these policies were related to the real estate industry. The market sentiments warmed up, benefiting the PVC powder market. However, demand failed to follow up. There is a big gap between positive policies and real demand status, which will possibly weigh on the PVC market to some extent. On the whole, SCI reckons that China’s PVC powder prices will keep firm in September.
In Q3, 2023, China’s PVC powder prices climbed notably mainly backed by the optimization of real estate policies and bullish expectations. In addition, though after mid-August PVC export orders weakened, there is a certain amount of export orders to be delivered, which will possibly drag down the inventory in September. Thus, China’s PVC powder SPOT prices will keep firm in September.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
