At the beginning of October 2024, the Polyvinyl Chloride (PVC) market saw price increases in both Asia and the US. While Asian PVC prices experienced a slight rebound, the market continues to face challenges with a supply-demand imbalance. However, positive macroeconomic factors have helped lift sentiment in the building materials sector across both regions.

The Asian PVC market experienced mixed market sentiments in September 2024, as supply levels remained strong while demand showed no significant improvement, contributing to ongoing challenges in balancing the market. Further, the PVC spot market showed strong performance at the start of October 2024, marking a significant rebound from its previous decline. Supported by positive momentum in the futures market, PVC prices climbed steadily throughout the week.

Market conditions have improved on both the supply and demand fronts, with the PVC operating rate remaining stable. Several enterprises, which had previously reduced their operational levels to control costs, have now increased their production rates in response to improved trading volumes and more favorable market sentiment. This shift has contributed to a slight uptick in overall operating rates in the PVC market. The renewed optimism in the market, fueled by stronger demand and a boost in trading activity, is expected to sustain the current upward trend in the PVC sector, reinforcing the positive outlook for the coming weeks.

U.S. PVC prices have climbed, driven by increased demand from the downstream construction sector and a tightening of domestic supplies. This price rise comes as U.S. homebuilder confidence edged up slightly in September, following a four-month decline, thanks to easing mortgage rates. According to the U.S. Bureau of Labor Statistics, construction employment also showed steady growth during the month, with 25,000 new jobs added—consistent with the average monthly gain of 19,000 over the past year.

On the upstream cost front, U.S. crude oil prices surged for the third consecutive session amid concerns that Israel may retaliate against Iran’s oil industry following Tehran’s recent ballistic missile attack. The West Texas Intermediate (WTI) November contract settled at $73.71 per barrel, marking a 5.15% increase, while the Brent December contract closed at $77.62 per barrel, up 5.03%. Year-to-date, U.S. crude has gained nearly 3%, and the global Brent benchmark is ahead by almost 1%.

As a result of rising operational costs and a slight uptick in downstream demand fundamentals, the outlook for the U.S. PVC market shifted upward in October 2024, signaling stronger market conditions ahead.

As per ChemAnalyst, it is expected that the PVC market to remain volatile, with prices likely to fluctuate in the near term in both regions. Futures prices are also experiencing volatility, with market participants largely adopting a cautious "wait-and-see" approach, closely monitoring developments as supply-demand dynamics continue to evolve.