PVC Futures Volatility (January 12)

January 13, 2026, 9:59 AM

TDD-global

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Guide

Highlights at a glance

On January 12, the PVC 2605 contract experienced extreme volatility, opening at a limit down of 4576 during the night session before rebounding sharply by 200 points. Prices rose steadily throughout the morning, breaking through 4900 in the afternoon and closing at a high. The contract recorded an opening price of 4760, a high of 4943, a low of 4576 (a 367-point range), with open interest increasing by 5,992 lots to 1,058,916 lots. Daily trading volume reached 2,341,738 lots, with 3.662 billion yuan evaporated and 52.41 million yuan in fund inflows. Regionally, spot prices first fell then rose, increasing by 20-50 yuan/ton across China. Upstream producers showed mixed pricing, with some lowering offers by 30-50 yuan/ton. The market outlook notes extreme technical volatility with narrowing Bollinger Bands, suggesting increased short-term swings. A key policy change announced by Chinese authorities will cancel the 13% export tax rebate for PVC products effective April 1, 2026, impacting futures and spot prices. While the recent price action appears detached from fundamentals, the PVC spot market may face significant adjustments in the near term.

PVC Futures Analysis: On January 12th, the PVC2605 contract opened at the night session and quickly hit the daily limit down, at 4576, before rebounding rapidly by 200 points. Prices rose steadily throughout the morning session, breaking through the 4900 mark in the afternoon and continuing to rise, closing at a high level. PVC2605 contract opening price: 4760, highest price: 4943, lowest price: 4576, price difference: 367, increase in open interest: 5992 lots, total open interest: 1058916 lots, settlement price: 4805, previous settlement price: 4868, down 63, daily trading volume: 2341738 lots. Evaporated funds: 3.662 billion yuan, fund inflow: 52.41 million yuan.

Regional Comprehensive Price Overview: Yuan/ton

PVC Spot Market: Domestic PVC market mainstream transaction prices first fell and then rose, the market was volatile. In terms of price comparison: Prices rose by 30 yuan/ton in North China, 30 yuan/ton in East China, 30 yuan/ton in South China, 20 yuan/ton in Northeast China, 50 yuan/ton in Central China, and 30 yuan/ton in Southwest China. Upstream PVC producers showed mixed pricing sentiment, with some slightly lowering their offers by 30-50 yuan/ton, while others maintained their previous levels.

Spot market prices fluctuated frequently, with a sharp drop on Friday night, hitting the daily limit down. This led to unstable pricing sentiment in the morning, with spot prices falling slightly by 20-30 yuan/ton. However, futures prices subsequently rose steadily, and in the afternoon, some traders suspended trading, while others recovered their losses or even raised prices.

Specifically, the basis offer for the May contract in East China was -(200, -250, -280), in South China it was -(200, -250, -300), and in North China it was (520, -580). In Southwest China, some May 2005 contracts traded at -300, -650, -680. Last Friday night, traders closed their positions and did not set prices. After Monday's futures price rose, this pricing advantage disappeared. Despite significant changes in the spot market, trading volume was generally flat.

PVC Market Outlook:

Futures Market: The PVC 2605 futures contract opened at its daily limit down on Friday night, then quickly rebounded. This unexpected price action lasted only a few minutes, triggering stop-loss orders for some long positions. Monday saw a dramatic reversal from limit down to a surge, with prices soaring to a high of 4943. The market was extremely volatile, with a daily trading volume of 2,341,738 lots. The price fluctuations were extremely wide, with a single-day adjustment of 367 points.

Technically, the Bollinger Bands (13, 13, 2) are narrowing rapidly, indicating an extreme price trend. Short-term price volatility is expected to increase significantly. Given the high close at the end of the session, further upward movement is possible in the night session, but the risk is escalating rapidly; caution is advised.

Regarding the spot market: The Ministry of Finance and the State Administration of Taxation announced that, effective April 1, 2026, export tax rebates for certain products, including polyvinyl chloride (PVC), will be cancelled. Specifically, export tax rebates for pure PVC powder, plasticized PVC, and non-plasticized PVC will be cancelled. Products exported after April 1, 2026, will no longer be eligible for any export tax rebates. Before this policy adjustment, the export tax rebate rate for PVC was typically 13%.

This news caused futures prices to hit their daily limit down on Friday night, but a significant rebound occurred on Monday. The spot market also experienced a decline followed by a rise, indicating that the price adjustments in both the futures and spot markets are unrelated to fundamentals. However, the direction and magnitude of the price movement have expanded, and overall, the PVC spot market price may still face a significant adjustment trend in the short term.

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