PVC Market Analysis Sep 9th
PVC Futures Analysis: On September 9th, the PVC2601 contract opened with a narrow range of price fluctuations, lacking clear direction. This small adjustment pattern continued in the morning session, weakening in late morning trading and falling further in the afternoon.
The V2601 contract opened at 4890, with a high of 4892 and a low of 4829, a spread of 63. Opening volume increased by 51,298 lots, leaving 1,292,086 open interest. The settlement price was 4864. Yesterday's settlement price was 4878, down 14%. Daily trading volume was 758,376 lots, with 4.384 billion yuan in deposits and 13,700 yuan in inflows.
Regional Price Summary: Yuan/ton
PVC Spot Market: The mainstream transaction prices in the domestic PVC market saw slight adjustments, and market sentiment was subdued. Comparing price estimates: North China saw a 10 yuan/ton drop, East China saw a 10 yuan/ton drop, South China saw a 10 yuan/ton drop, Northeast China saw a 30 yuan/ton drop, Central China remained stable, and Southwest China remained stable.
Upstream PVC manufacturers are mostly maintaining a wait-and-see attitude towards ex-factory prices, but as of now, ex-factory prices have remained largely low, creating a subdued market sentiment. Futures prices weakened in the afternoon, further dampening spot market sentiment. However, low-priced futures prices have a significant advantage in trading.
Basis spreads for the 01 contract in East China are quoted at -(110, -180, -250), in South China at -(100, -200), in Northern China at -(360, -430, -460), and in Southwest China at -(300, -510, -640). Overall, spot prices are averaging both spot and fixed prices, but downstream buyers are generally more likely to place orders at low spot prices.
PVC Market Forecast:
Futures: The PVC2601 contract price has recently hit a new low, with open interest increasing by over 51,298 contracts. Funds continue to flow into the market, increasing open interest. Shorts have been aggressively pursuing the market while trading at low levels. Trading volume shows a 27.3% short position compared to a 23.8% long position. Technically, the daily Bollinger Bands (13, 13, and 2) are trending downward.
The daily KD line crosses, and the MACD line continues its dead cross trend. At midday close, the main domestic futures contracts saw mixed gains and losses. At this point in time, there are no signs of peak season activity. Without policy or news support, futures prices are likely to remain relatively sluggish in the short term. The support range of the lower band, 4810-4820, is expected to be observed.
Spot: Traders in the spot market are struggling to execute high, fixed-price bids. Basis bids have seen slight adjustments, and spot trading offers a slight price advantage. Downstream purchasing enthusiasm is low, pending orders are low, and actual trades are few and far between. The current spot market is essentially continuing its previous period of testing lows, with futures prices remaining low and spot prices also relatively low. While market sentiment is currently weak, we believe further downward movement is limited, though risks remain.
First, at current prices, absent new negative factors, long positions may face resistance at low levels. Furthermore, with the anticipated peak season of September and October, overall, while PVC spot prices may consolidate at low levels in the short term, further downward movement is limited. Be wary of news-driven price swings in both the futures and spot markets.
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