China's local and export PP, PE, PVC markets stabilize as futures rebound

China’s domestic and export markets for PP, PE, and PVC opened the week on a firmer note after a rebound in Dalian futures encouraged suppliers to pause the prolonged price decline and test modest price increases. Despite the improvement in sentiment, market participants said demand fundamentals remain weak, with buyers continuing to purchase only for immediate production needs.

The recent recovery in futures provided temporary support to the market. September PP and LLDPE futures recorded three consecutive sessions of gains, while PVC futures also strengthened before easing slightly on July 7. This helped sellers lift offers modestly after weeks of continuous price corrections.

However, the broader market outlook remains cautious. Seasonal weakness in downstream demand, slow manufacturing activity, and expectations of increasing supply continue to weigh on sentiment. Buyers remain reluctant to build inventories, expecting prices to stay under pressure in the coming weeks.

Market sources noted that additional PE and PP production capacity is gradually returning as maintenance shutdowns end, increasing available supply. Although operating rates and inventories remain relatively controlled, downstream processors continue to reduce production due to weak end-user demand, limiting any meaningful recovery in buying interest.

Inventory data also reflected the cautious market environment. Polyolefin inventories held by China's two major producers remained unchanged from the previous day but were higher than the previous week, indicating that lower stock levels have been supported more by controlled production than by stronger consumption.

In the PVC market, participants remain skeptical about the recent price recovery. Oversupply, sluggish domestic demand, limited export buying, and stronger overseas competition continue to pressure the market. Traders believe that without a clear improvement in downstream demand, the current rebound may prove temporary.

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