Southeast Asia PVC Markets Turn Lower as Weak Demand Ends Extended Rally

Domestic PVC markets across Southeast Asia have started to retreat after gaining steadily for around two and a half months. The reversal began in early October, following the recent decline in import PVC prices, and pushed domestic values down from three- to four-month highs.

The latest weakness has been driven mainly by poor demand and growing resistance from buyers toward elevated price levels. However, firm upstream costs have prevented sellers from making steep reductions, keeping the decline relatively controlled so far.

Market activity has remained subdued into October, with China’s week-long National Day holiday adding to the slowdown. At the same time, regional buyers are watching the return of Chinese suppliers closely, as more competitive offers could put additional pressure on PVC prices when demand remains weak.

Weak Demand Limits Buying Activity

Poor downstream consumption continues to weigh heavily on PVC markets across Southeast Asia. Seasonal rains have further affected construction activity in several countries, with Thailand particularly impacted by unfavorable weather conditions.

Weak economic conditions have also discouraged buyers from building inventories. After prices climbed for more than two months, many downstream consumers have become increasingly unwilling to accept current levels and are now purchasing only what is needed for immediate production.

Some buyers have postponed replenishment in expectation of further price concessions, forcing sellers to become more flexible when negotiating deals.

Vietnam has been one of the markets facing particularly weak demand. Although the country recorded faster GDP growth in the third quarter, continued difficulties in the property sector have affected construction-related activity. New policies have made some property transactions more challenging, while limited access to capital has delayed projects.

The difficulty in selling completed properties has also reduced the appetite for new investment. As a result, converters remain cautious and are generally avoiding stock-building, preferring to purchase PVC according to immediate requirements.

High Costs Limit Downside

Despite the deterioration in demand, elevated upstream costs are providing some protection against a sharper PVC price decline.

Brent crude has remained above $100/bbl despite significant volatility in recent weeks, keeping energy costs high across the petrochemical chain. Spot ethylene prices on a CFR Southeast Asia basis were around $1,120/ton after easing over the previous two weeks.

This has created a clear gap between sellers attempting to protect margins and buyers seeking lower prices. Suppliers have shown more flexibility where needed to close transactions, but the firm cost structure has limited their ability to reduce offers aggressively.

For now, the market correction therefore appears to be a gradual retreat from elevated levels rather than a steep price drop.

Chinese Supply Could Increase Pressure

PVC players across Southeast Asia are also preparing for the return of Chinese suppliers following the National Day holiday. The immediate impact is expected to be more visible in the regional import market, where greater availability of Chinese material could give buyers additional sourcing options.

If Chinese suppliers return with more competitive offers, lower import prices could eventually weigh on domestic markets as well. Buyers would gain greater leverage in negotiations, making it harder for local producers and distributors to maintain current price levels.

Domestic sellers may therefore have to adjust offers to remain competitive, particularly in markets where demand is already under pressure. However, firm upstream costs could restrict the size of any further reductions.

Overall, the return of Chinese suppliers is unlikely to be the sole cause of weakness in Southeast Asia’s domestic PVC markets, but it could amplify the downward pressure created by sluggish demand and increasing buyer resistance.

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