Poly Vinyl Chloride (PVC) price trajectory shows signs of pessimism for the downstream offtakes across the globe for October 2023. The PVC market players stopped the procurement activities in the line of ample stock availability and dip in the expectations for a rise in the demand fundamentals for the product in the coming weeks.

The PVC prices in the USA were stable for this week amidst a persistent downturn in the demand fundamentals in the downstream construction industry amidst limited availability of stocks with a rise in the upstream crude oil prices in the line of tight stock availability. From the demand perspective, the US downstream construction sector suffers from high mortgage rates and rising interest rates by the Federal Reserve of the USA. As a ripple effect, PVC consumption in the downstream industries continued experiencing sluggish consumer confidence in the US market towards the termination of September 2023. Moreover, the US central bank is anticipated to raise interest rates in the coming quarter and deteriorating PVC offers from the housing market as these higher rates make housing unaffordable to US consumers.

The weakening eurozone economic conditions also causing concerns about the PVC market situation and are expected to be bearish in October as their Gross Domestic Product (GDP) declined, marked by a contraction in exports and deterioration in manufacturing activities amidst a cautious approach towards surging crude oil values. However, in Europe, PVC prices have been on the upward side for a short period amidst higher input costs and low production run rates to fulfill current demand in the regional market.

The PVC prices in the Chinese market fell by 1.2% in the week ending September 22, 2023, governed by the low demand in the downstream industries, including packaging and construction, in the oversupplied market. The PVC market players in the regional market paused the procurement activities in line with ample stock availability. The expectations for a rise in the demand fundamentals amongst the PVC market participants surprisingly fell for the coming weeks amidst tepid economic growth and lowered international new orders. Moreover, the feedstock (Calcium Carbide) price trend also supported the declining trend of PVC amidst a drop in the prices towards the end of the month. The market players were also cautious about the weak market transaction situation amid pre-holiday restocking in China.

As per the ChemaAnalyst, PVC prices may decline for the coming weeks across the global market on account of a marginal change in downstream construction segment demand and surplus supplies. At the same time, the production challenges may weigh on the PVC price dynamics amidst the elevation in the input costs in the line of a surge in the crude oil future values. Meanwhile, the downstream construction demand remains a reflection of hope amid global headwinds in the last quarter of 2023.