China's PVC Market Sees Price Volatility Amid High Inventory and Weak Demand"

Key Takeaways:

• Polymer prices remain mostly stable in India, with slight increases in LLDPE, now at ₹87/kg ex-Mundra/Bhiwandi.
• The Chinese PVC market shows volatility due to increased production and high inventories, dampening price momentum despite seasonal demand fluctuations.
• Rising calcium carbide prices (up 7.4%) add cost pressure to the PVC market, yet ample supply limits overall price support.

Current Polymer Prices and Market Movement in India

• PP Raffia (±0)Rs91/kg levels Ex Godown
• PP film (±0) Rs.100 kg levels Ex Godown
• PPCP (±0) Rs.99/kg levels Ex Godown
• PP Lamination(±0) 101 /kg levels Ex Godown
• LLDPE(+1.5) Rs.87/kg Ex Mundra/Bhiwandi
• LDPE prices are around(±0) Rs.116kg Ex Mundra/Bhiwandi
• HDPE PE100 natural (±0) Rs.89/kg Ex Mundra/Bhiwandi
• HDPE PE100 black (±0) Rs.90/kg Ex Mundra/Bhiwandi
• HDPE HM (±0) Rs.90/kg Ex Mundra/Bhiwandi
• HD Blow Molding(±0) Rs.91/kg Ex Mundra/Bhiwandi
• Low K (DG700) Rs 80.50 Ex Nhava Sheva/Mundra
• Low K (B57) Rs 85.50 Ex Nhava Sheva/Mundra
• LG LS100H Rs 77.50 Ex Mundra/Bhiwandi

PVC Market Analysis: Supply, Demand, and Cost Impacts

• The PVC spot market in China showed mixed performance. Initially, prices increased due to a post-National Day holiday market boost, but gains were unsustainable as fundamental support weakened. By mid-month, as futures prices reversed, spot prices declined in response.
• The operating rates of PVC manufacturers rose, with over half running at full capacity, which increased market pressure and prompted dealers to lower their offers.
• Despite stable downstream purchases focused on essential needs, buyer enthusiasm for speculative inquiries remained low, contributing to a relatively sluggish trading atmosphere. Toward the end of the month, minor price rebounds were observed, though they were confined to a narrow consolidation range.
• Inventory levels remained high throughout October, with slow progress in de-stocking, though there was a modest decline in social inventory as transaction volumes increased slightly near the end of the month. However, spot supply stayed abundant due to previously large inventories and increased production rates.
• On the cost front, the calcium carbide market—an important input for PVC—continued its upward trend, with a monthly price increase of 7.4%. Despite these higher input costs, overall cost support for PVC was limited by the ample supply and muted demand in the market.

International Market Updates and Key Polymer News

• European Styrene contract Price for November increased by Euro 5/MT from its October settlement levels and assessed at Euro 1415/MT, CIF North West Europe levels.
• Petronas Chemicals is aiming to restart its HDPE and LLDPE Plants in mid-November, 2024 after maintenance work. The Plants are located in Kerteh, Malaysia.
• Grand Pacific Petrochemical Corp (GPPC) is planning to operate its No.3 Styrene Monomer (SM) Line at full rates in near term. The Line is located in Kaohsiung, Taiwan.
• INEOS has lifted a Force Majeure (FM) on the supplies of Polypropylene (PP) impact Copolymer products from its Plant on 4th November, 2024 following equipment failure. The Plant is located in Chocolate Bayou, Texas.
• European Styrene contract Price for November increased by Euro 5/MT from its October settlement levels and assessed at Euro 1415/MT, CIF North West Europe levels.

Expert Opinion on PVC Market Trends

The PVC market's supply-demand imbalance will persist in the short term, with high operating rates and elevated inventory levels among manufacturers and in the market overall. Additionally, any further rise in calcium carbide prices is unlikely, meaning cost support will remain moderate. In the futures market, weak performance has dented spot market confidence, leaving a generally bearish sentiment. As a result, the PVC spot market is expected to continue experiencing weak and volatile conditions in the near term, with close monitoring of further market developments.