PVC rebounds across China and SEA as upstream rally reshapes market sentiment

China’s and Southeast Asia’s PVC markets recorded their first notable recovery in nearly four months this week as stronger crude oil prices and higher upstream costs improved market sentiment. Renewed geopolitical tensions in the Middle East pushed Brent crude sharply higher, while ethylene prices across Asia also strengthened, encouraging suppliers to increase PVC offers after months of continuous declines.

Despite the price rebound, the market remains largely driven by rising production costs rather than stronger demand. Buyers across the region continued to purchase only for immediate requirements, while attention shifted toward the upcoming August price announcement from a major Taiwanese producer, which is expected to influence regional pricing in the weeks ahead.

China market recovers after prolonged weakness

China's domestic PVC market posted its first meaningful gains after more than three months of steady declines. Ethylene-based PVC increased by around CNY150–300/ton ($22–44/ton), while acetylene-based PVC rose by CNY150–250/ton ($22–37/ton) compared with the previous week.

The improvement was supported by higher crude oil, naphtha, and ethylene costs, along with stronger PVC futures, which boosted supplier confidence. Chinese exporters also lifted FOB offers, raising ethylene-based PVC by $10–30/ton and acetylene-based PVC by $20–30/ton, marking the first weekly increase since March. Exporters reported a slight improvement in buying inquiries, although concluded business remained limited.

Southeast Asia follows with higher import offers

The stronger upstream environment also supported Southeast Asia's import market. Import prices for PVC K67-68 increased by $20–40/ton during the week as suppliers from China and South Korea adjusted offers upward to reflect rising feedstock costs.

Expectations that a leading Taiwanese producer will announce higher August benchmark prices further strengthened sellers' confidence, leading to firmer quotations across the region.

Demand remains the biggest challenge

Although prices have started to recover, downstream demand continues to lag. Most converters across China and Southeast Asia are still purchasing only small volumes to meet immediate production needs, as orders for finished products remain weak.

Market participants in Vietnam and Thailand reported that they are maintaining a cautious buying strategy, preferring to wait before making larger purchases despite the recent price increases.

China also continues to face oversupply issues. Weak seasonal demand, slower construction activity due to the rainy season, and subdued export buying have limited market activity. Competition in export destinations such as India remains intense, making it difficult for Chinese suppliers to secure additional sales.

While some PVC producers have reduced operating rates to control losses, several plants are expected to increase production in the coming weeks, which could add further supply pressure.

Focus shifts to August benchmark offers

The market is now closely watching the August pricing announcement from Taiwan's major PVC producer, which is widely expected to influence regional trading sentiment.

Many market participants expect price increases as higher crude oil and feedstock costs continue to support production economics. However, estimates vary, with expectations ranging from moderate adjustments to larger hikes if energy prices remain elevated.

Even if benchmark offers move higher, most traders believe a sustained market recovery will ultimately depend on stronger downstream demand and tighter supply rather than higher production costs alone.

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