PVC Market Analysis: Price Trends (December 22)
PVC Futures Analysis: On December 22nd, the PVC2605 contract opened slightly lower in the night session, followed by a narrow range adjustment. Prices weakened slightly in the morning session, and the afternoon saw a narrow range adjustment at lower levels, without a clear direction.
PVC2605 contract opening price: 4635, highest price: 4646, lowest price: 4565, price difference: 81, increase in open interest: 29963 lots, total open interest: 970130 lots, settlement price: 4599, previous settlement price: 4671, down 72, daily trading volume: 1,145,480 lots. Evaporated funds: 3.118 billion yuan, fund inflow: 56.15 million yuan.
Regional Comprehensive Price Overview: Yuan/ton
PVC Spot Market: Domestic PVC market mainstream transaction prices continued to decline, and market sentiment cooled somewhat. Price comparisons show that prices fell by 20-30 yuan/ton in North China, 70 yuan/ton in East China, 60-80 yuan/ton in South China, 50 yuan/ton in Northeast China, 70 yuan/ton in Central China, and 20-80 yuan/ton in Southwest China.
Upstream PVC producers maintained stable ex-factory prices for some, while others slightly lowered them by 20-30 yuan/ton, including a slight decrease in prices for off-site warehouses to stimulate transactions. Futures prices continued to fall, while the spot market lacked a clear pricing strategy.
On Monday, the fixed price decline widened, with both spot and fixed prices coexisting. The basis for spot quotes shifted towards the May contract, with basis offers in East China at -250, -270, in South China at -200, -220, and in North China at -470, -530. In Southwest China, some sources offered a basis of -250, -590 for the May contract. Following the weakening of spot market prices, trading activity did not improve, with Monday's trading session remaining quiet.
PVC Market Outlook:
Futures Market: The PVC2605 futures contract saw a slight weakening in price action, shifting downwards compared to the morning's trading range. Technically, the Bollinger Bands (13, 13, 2) have narrowed significantly, and while open interest increased slightly, short positions were slightly more prevalent (25.4% short, 24.2% long).
The daily KD and MACD lines show a diminishing golden cross trend. With the 05 contract becoming the main contract, the previous rebound trend has essentially ended. After the factors driving the inward rotation have subsided, the market is returning to a fundamental-based adjustment. However, the technical closing price is starting to shift slightly bearish, suggesting that the 05 contract will still face some pressure in the first half of the trading session. In the short term, prices may return to the lower Bollinger Band range, with a potential range of 4500-4650 to be observed.
In the spot market: Firstly, regarding the sentiment surrounding futures prices, the January contract fell to a low of 4205 during the main trading period, reaching a new historical low. After the news subsided, the sentiment towards the May contract was slightly bearish for the first half of the period. Spot prices also began to decline accordingly.
Although some chlor-alkali companies reduced their operating rates, the losses did not cause significant market fluctuations. Overall, the market sentiment remained weak. In short, the industry chain's view on the market before the Spring Festival was slightly bearish.
Internationally, oil prices rose due to the potential supply disruptions caused by the US blockade of Venezuelan oil tankers, and the market awaiting the outcome of the Russia-Ukraine peace talks. Overall, the PVC spot market is likely to see narrow-range adjustments in the short term.
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