PVC Rebounds Across China and Southeast Asia as Rising Feedstock Costs Lift Sentiment

China and Southeast Asia's PVC markets recorded their first notable recovery in nearly four months this week, supported by a sharp rise in crude oil and upstream feedstock prices. Escalating geopolitical tensions in the Middle East pushed energy markets higher, strengthening production costs and encouraging suppliers to increase offers after an extended period of price declines.

The recovery was largely driven by higher costs rather than stronger demand. Although market sentiment improved, downstream buying remained cautious due to slow consumption and sufficient inventories. Market participants are now closely watching the upcoming August PVC price announcement from a major Taiwanese producer, which is expected to influence regional trading trends.

China Market Leads the Recovery

China's domestic PVC market posted its strongest weekly gains in months. Ethylene-based PVC increased by CNY150-300/ton, while acetylene-based PVC rose by CNY150-250/ton compared with the previous week. Higher crude oil prices boosted naphtha and ethylene costs, while stronger PVC futures improved sellers' confidence.

Chinese exporters also raised FOB offers, with ethylene-based PVC increasing by $10-30/ton and acetylene-based PVC by $20-30/ton. The price adjustments reflected higher production costs and a modest improvement in buying inquiries.

Several producers noted that stronger upstream markets had improved pricing confidence, although export demand remained moderate.

Southeast Asia Follows with Higher Import Offers

The stronger cost environment also supported Southeast Asia's import market. Import PVC K67-68 offers increased by $20-40/ton during the week as suppliers from China, South Korea and other exporting countries revised prices upward.

Expectations that the major Taiwanese producer will announce higher August PVC prices also encouraged sellers to raise offers, adding further support to the regional market.

Demand Remains Weak

Despite firmer prices, demand across both China and Southeast Asia remained sluggish.

Converters continued buying only small volumes to meet immediate production needs, while weak orders for finished products discouraged inventory building. Seasonal factors, including China's rainy season and slow construction activity, also continued to limit PVC consumption.

Export demand remained under pressure as buyers in key overseas markets adopted a wait-and-watch approach, keeping transaction volumes relatively low despite the recent price recovery.

Supply Continues to Cap the Upside

China continues to face comfortable PVC availability, although production cuts and reduced operating rates at several plants have helped prevent a further build-up in supply. However, some producers are expected to gradually increase operating rates, which could add fresh supply pressure in the coming weeks.

Market Focus Shifts to August Pricing

Attention is now centered on the August PVC price announcement from the major Taiwanese producer. Most market participants expect higher offers due to rising crude oil and feedstock costs, although estimates for the increase vary.

While stronger benchmark prices could provide additional support to the regional market, many traders believe a sustained recovery will still depend on stronger downstream demand and a better balance between supply and consumption.

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