How Will China PVC Market Evolve?
Preface: After the holiday, both China’s domestic PVC powder prices and foreign prices saw a downward trend. During the National Day holiday, international crude oil prices moved down, dampening the market sentiment. PVC futures prices dropped below RMB 6,000/mt. In addition, the high inventory weighed on the PVC powder market. China’s PVC market prices dipped.
1. PVC producer inventory piled up notably.
2023 PVC Powder Inventory Change After Holiday
The increment rate of PVC powder producer inventory was around 22%, which was beyond expectations, while that of social inventory was within the expected range. The price spread was largely consistent with that before the holiday.
2. China’s PVC powder export prices shrunk as Indian buyers continued to cut purchasing prices.
Up to October 11, the mainstream offer of calcium carbide-based PVC powder hovered at $735-747/mt FOB, down $33-45/mt compared with that before the holiday. The mainstream offer of ethylene-based PVC powder hovered at $730-750/mt FOB, down $30/mt compared with that before the holiday. As futures prices saw a downtrend after the holiday and industry inventory remained high, Indian buyers cut purchasing prices from $720/mt to $700-710/mt, and transactions were scarce. The export price was acceptable to buyers in Southeast Asia. Thus, China’s domestic enterprises received limited export orders.
3. Buying sentiments showed differences in different regions.
Downstream enterprises in East China showed fairish purchasing interests because of lower prices, so the transaction was passable. However, transactions in North China were soft affected by sluggish downstream demand and bearish sentiments.
October usually sees a demand peak season. However, SCI reckons that orders will possibly fail to improve significantly in October 2023. At the end of October, in some regions in northern China, downstream enterprises may halt production gradually, while real estate construction will likely be suspended affected by hot weather, dragging down China’s domestic consumption. After the holiday, Indian buyers inquired frequently, while buyers in Southeast China purchased constantly, benefiting the PVC powder market to some extent. On the whole, it is expected that China’s PVC powder spot prices will likely inch down. The change in exports should be concerned.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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