PVC Prices Ease in China and Southeast Asia as Oil Decline Weighs on Sentiment

PVC markets across China and Southeast Asia moved lower this week as a steep fall in crude oil prices encouraged buyers to delay purchases, anticipating further price reductions. Import PVC prices in Southeast Asia pulled back from their highest levels since May, while China's domestic market also turned weaker after reaching multi-month peaks, according to ChemOrbis Price Index data.

Brent crude dropped from nearly $115/bbl to below $90/bbl in just over a week, significantly weakening market sentiment and reducing sellers' pricing power after the recent rally. As buyers became increasingly hesitant to make fresh commitments, more competitive offers started appearing, particularly in Southeast Asia. Weak demand from downstream sectors added to the pressure created by lower energy costs.

However, market conditions have varied across the region. In China, production cuts, planned maintenance shutdowns and declining inventories have continued to offer some support, potentially restricting the extent of price declines despite the weaker upstream market.

China's PVC gains reverse, while supply limitations provide support

China's domestic PVC market turned lower this week. Ethylene-based K67 prices retreated from their highest levels since September, while acetylene-based K67 prices eased from levels last recorded in April. The correction followed the sharp decline in crude oil prices, which weakened the cost-driven support behind the market's recent rally.

A producer source said the latest price adjustments were largely linked to volatility in energy markets. Domestic demand remained weak but relatively stable, while export enquiries were moderate. Expectations of further price reductions have made buyers more cautious, resulting in limited trading activity.

Despite the weaker sentiment, supply-side factors have helped prevent a sharper decline. Production is expected to remain relatively low due to ongoing output cuts and scheduled maintenance shutdowns. Meanwhile, industry inventories have continued to decrease, providing additional support to the market.

Southeast Asian import PVC prices retreat from May highs

In Southeast Asia, import PVC prices have started declining after reaching their highest levels since May, reversing the recent upward movement. Lower crude oil prices, stronger buyer resistance and the availability of more competitive offers, particularly in Vietnam, have contributed to the correction.

The change in market sentiment has become increasingly apparent as sellers find it harder to maintain their previous asking prices. A Vietnamese trader said that although its offers remained unchanged, concluding sales had become more challenging as lower-priced alternatives from other origins entered the market.

US-origin PVC offers have also faced downward pressure. A Vietnamese converter reported receiving offers at around $840/ton CIF, while some deals were concluded as low as $800/ton CIF. However, the buyer preferred to stay out of the market, citing sufficient inventories and no immediate need to replenish stocks.

Another converter confirmed that offers had fallen by approximately $20-30/ton from the previous week and expected further reductions in the coming days. As a result, the buyer continued to adopt a wait-and-see approach instead of making fresh purchases.

The availability of lower-priced cargoes has strengthened expectations of further price corrections, leaving sellers with limited scope to defend their higher offers. With downstream demand remaining sluggish and many buyers already holding sufficient stocks for their immediate needs, the recent decline in crude oil prices has further weakened the market's ability to sustain elevated PVC prices.

Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.