Vinyl Chloride Monomer (VCM) prices exhibited a declining trend since February 2025 and are expected to consistently decrease in March 2025. The recent dip was driven by higher inventory levels and reduced upstream Ethylene cost pressure. Following the spring festival, a slight increase in demand emerged as downstream buyers restocked feedstock VCM. However, as the replenishment of stock ended, demand eased, adding further downward pressure to the VCM market during the first half of March 2025. Meanwhile, the reduction in the downstream PVC production rates constrained demand, contributing to the overall price depreciation in the region.

The VCM market in the APAC region followed a consistent price decline throughout February 2025, due to lowered feedstock EDC prices and sufficient supplies. The upstream Ethylene prices also declined in line with a steady decrease in the crude oil costs, leading to ease in the production costs and intensifying the downward pressure on the VCM market. The OPEC basket crude oil prices declined to USD 72 per barrel in February 2025.

By the start of March, weak demand from the downstream PVC sector, further exacerbated the market downturn. Low consumption levels, delayed terminal deliveries, and rising inventory pressure restricted any potential recovery in VCM demand. Additionally, slow inventory movement and cautious procurement sentiments among the buyers added to a persistent price slump in the VCM prices.

Moreover, a notable decline in Drewry’s Intra-Asia Container Index (IACI) by 2% in the week ending March 15, 2025, to USD 604 per 40ft container. This reduction in freight rates also contributed to the lower VCM prices by easing import costs across the region.

As a result of surplus stockpiles, weak downstream demand fundamentals, and diminishing feedstock Ethylene Dichloride (EDC), the Asian VCM market will continue to contract in March 2025. The increased shipping capacity and lower freight charges are likely to support sufficient market supply. As a result, VCM price movements are expected to stay subdued in the short future.

As per ChemAnalyst, the VCM price trend is likely to fall in the second half of March 2025 as the upstream Ethylene prices will continue to fluctuate with crude oil values. Furthermore, the expected dip in the downstream PVC demand and slow inventory restocking is likely to limit the rebound in VCM consumption in the APAC region, keeping the prices at lower levels throughout the first quarter of 2025. However, even if downstream PVC producers slowly start up again, they still have a lot of VCM inventory to balance the market in the near term.