PVC Prices in Asia Continue Downward Trajectory Amid Weak Market Fundamentals

Since the beginning of November 2024, Polyvinyl Chloride (PVC) prices in the Asian market have maintained a declining trend, impacted by weak fundamentals and sluggish downstream market sentiment.

The PVC market has been under pressure from various factors, including the weak upstream crude oil market and declining futures prices, which have influenced spot markets. Loose supply-demand dynamics have exacerbated the downward trend, with most PVC manufacturers increasing their operational rates over the past two months. More than half of these manufacturers are now operating at full capacity, contributing to heightened shipment pressures and forcing dealers to lower their offers. 

Downstream activity remained lackluster in the PVC market during this timeframe as buyers prioritized spot purchases while adopting a cautious stance in inquiry-based procurement. This has led to a sluggish trading atmosphere, with transactions primarily driven by basic needs. The absence of robust buying enthusiasm has further weighed on the current PVC prices. 

On the upstream side, Calcium Carbide prices, a key raw material for PVC production, have remained stable since the first week of November, providing limited cost support. The latest insights indicated no price increase for calcium carbide during this period. However, the weak performance of PVC has raised concerns that calcium carbide prices could also face fluctuations in the near term. 

The lack of upward momentum in Calcium Carbide prices, combined with the bearish sentiment in PVC futures, has reinforced market pessimism. The futures market has played a significant role in undermining confidence in spot transactions, further contributing to the weak trading environment. 

The supply side of the Polyvinyl Chloride (PVC) market remains stable yet faces logistical challenges, particularly for exporters. Shipping container rates from East Asia and China to the United States held steady this week, providing some relief on transportation costs.

Moreover, the current imbalance in supply and demand is expected to persist in the short term. High operating rates among manufacturers, coupled with elevated inventory levels at both enterprise and market levels, suggest continued downward pressure on PVC prices. Additionally, with limited support from upstream costs and bearish sentiment dominating the futures market, the PVC spot market is likely to remain weak and volatile. 

As per ChemAnalyst, in the weeks ahead, PVC prices are likely to remain at subdued levels as the downstream market fundamentals are expected to remain dull in the Asian market along with weak external factors such as energy prices. Market participants are anticipated to monitor potential changes in supply dynamics or fluctuations in upstream costs in the Asian PVC market.