PVC Prices Dive on Nov 5
PVC Futures Analysis: On November 5th, the PVC2601 contract opened higher but then fell in the night session, consolidating at lower levels. The morning session continued the trend from the night session, with no significant changes in the afternoon. PVC2601 contract opening price: 4658, highest price: 4662, lowest price: 4622, price difference: 40, increase in open interest: 38,511 lots, total open interest: 1,282,294 lots, settlement price: 4638, previous settlement price: 4674, down 36, daily trading volume: 768,285 lots. Evaporated funds: 4.163 billion yuan, fund inflow: 97.17 million yuan.
Regional Price Overview: Yuan/ton
PVC Spot Market: Domestic PVC market mainstream transaction prices saw a slight decline, with the spot market remaining weak. Price comparisons show that prices fell by 30 yuan/ton in North China, 30-50 yuan/ton in East China, 30 yuan/ton in South China, 20 yuan/ton in Northeast China, 20 yuan/ton in Central China, and 50 yuan/ton in Southwest China.
Upstream PVC producers generally lowered their ex-factory prices by 20-30 yuan/ton. Upstream companies' pricing sentiment was unstable, and the futures market continued to weaken slightly, breaking previous lows. Spot market traders in various regions were willing to lower their fixed prices at any time. With futures prices declining, the pricing advantage was relatively obvious.
Specifically, the basis for the January contract in East China was -(50, -100, -140), in South China it was -(20, -50), in North China it was -(330, -360, -380), and in Southwest China, some sources had individual January contracts at -(200, -330). After the price decline, transactions were mostly spot-price deals, primarily driven by downstream restocking for immediate needs. Inquiries increased after the price drop, and low-price transactions were still acceptable.
PVC Market Outlook:
Futures Market: The PVC2601 futures contract saw a new low of 4622, marking a new low for the year. The market showed some increase in open interest. In terms of trading volume, short positions accounted for 26.7% compared to long positions for 23.7%, indicating a predominance of short positions. The price broke through the lower Bollinger Band support level, indicating a deep downward trend.
Technically, the lower Bollinger Band (13, 13, 2) is turning downwards, the daily KD line shows a widening death cross, and the MACD lines have crossed, all indicating a bearish trend. Even within the low price range, there is still continuous inflow of open interest, suggesting further weakening of the market. In the short term, the price movement should be monitored within the low range and around the psychological level of 4600-4620.
In the spot market: At midday closing, domestic futures contracts mostly declined, with polysilicon falling over 2%, and fiberboard, asphalt, caustic soda, red dates, rebar, polypropylene, styrene, and international copper all falling over 1%. Among chlor-alkali products, caustic soda and PVC saw alternating declines, indicating a weak overall industry chain.
Looking at PVC fundamentals, upstream enterprises maintained relatively stable operating rates. In terms of demand, the short-term market showed a "buy on dips, not on rallies" mentality. While trading improved somewhat after the decline in both futures and spot prices today, it was mainly driven by immediate needs.
Although prices fell to low levels and upstream factories further lowered prices, it still failed to stimulate additional demand. Given the anticipated sluggish fourth quarter, stockpiling in the spot market is unlikely. Overall, the PVC spot market price is likely to continue facing some pressure in the short term.
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