PVC: Price Trends & Outlook (December 17)
PVC Futures Analysis: On December 17th, the PVC2601 contract opened with a slight adjustment, exhibiting limited price fluctuations. The morning session continued this pattern, with a slight increase in the afternoon, closing at a high level.
PVC2601 contract opening price: 4400, highest price: 4425, lowest price: 4382, price difference: 43, decrease in open interest: 109,488 lots, total open interest: 382,226 lots, settlement price: 4401, previous settlement price: 4360, up 41, daily trading volume: 489,344 lots. Evaporated funds: 1.183 billion yuan, outflow: 331 million yuan.
Regional Price Overview: Yuan/ton
PVC Spot Market: Domestic PVC market mainstream transaction prices continued to rise, with prices rebounding after a sharp decline. Price comparisons show that prices rose by 3 yuan/ton in North China, 10-20 yuan/ton in East China, 10-20 yuan/ton in South China, 20 yuan/ton in Northeast China, 20 yuan/ton in Central China, and 10-50 yuan/ton in Southwest China.
Upstream PVC producers are still raising their ex-factory prices, with increases ranging from 20-30-50 yuan/ton, moving away from the previous low range starting with 3. Futures prices consolidated at high levels after the initial rise, but closed higher.
The spot market showed strong pricing sentiment, with traders in various regions still offering higher prices. Both spot and fixed-price quotes were available. Specifically, the basis quotes for the January contract in East China were -(0, +40), in South China -(0, +30), in North China (-530, -560), and in Southwest China, some sources offered -(130, -150, -250) for the January contract. The spot market saw sluggish trading, with high prices suppressing demand and downstream orders being few due to a lack of pricing advantage.
PVC Market Outlook:
Futures Market: The PVC2601 futures contract continues to face the rollover process. Open interest in the 01 contract has remained stable, and the price spread between the 01 and 05 contracts has remained around 260. Given the current timeframe, the 01 contract has insufficient time to consolidate, and with continued reduction in open interest, a large basis spread is likely to complete the main contract rollover.
The 05 contract saw a slight increase in open interest today, with both long and short positions entering the market. Both the spot and futures markets have shown an upward trend for three consecutive days this week.
With prices closing at higher levels, similar to the previous downward trend, there may still be some potential for a small upward push. We maintain our previous view that prices may continue to rise slightly in the short term, but with limited time remaining for the 01 contract, the upside potential is expected to be relatively limited.
In the spot market: From a supply and demand perspective, on the supply side, most upstream PVC producers are operating at stable capacity, with only a few experiencing some instability. However, this has little impact on the overall supply, which remains high, leading to high social inventory levels.
On the demand side, downstream demand remains in the off-season. In terms of news, there's the anti-involution phenomenon and a press release from Westlake Corporation on December 15, 2025, announcing the closure of some vinyl chloride and styrene production facilities in North America.
Overall, the strong supply and weak demand, along with high inventory levels, are clear indicators. Given the excessive suppression of both the futures and spot markets, the recent price recovery is a rebound from a deep decline. In the short term, the PVC spot market may see a narrow adjustment after the initial rise, with some slight upward expectations, but the extent of the increase may enter a period of rational adjustment.
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