PVC Demand is Persistently Low and Likely to Improve in Asia Soon

Towards the third week of March 2023, Polyvinyl Chloride (PVC) prices fluctuated at a narrow range in the Asian market, owing to the slow demand and manufacturers limiting the operational activities in the face of an abundance of inventories in the market. Presently, the PVC inventory is at a historically high level for the discussions of March, and the market players opted to destock at lower margins for further growth of the commodity market in APAC.

In China, the February price trend of PVC showed mixed sentiments, as firstly, before the Spring Festival, product prices continued to rise under the strong real estate offers and optimistic demand expectations. Further, after the holiday, the resumption of operations in the downstream industries was slow and influenced the PVC market significantly in China. In March, plants are running at lower rates as Taizhou Liangcheng, with a total capacity of 600,000 MT/year, opted to slow operational rates on 18 February 2023 due to uncertainty in the PVC demand, and meanwhile, Xinjiang Shengxiong has announced maintenance turnaround from 20 February 2023, with a total capacity of 550,000 mt/year. The final prices of PVC have resulted from the diminishing demand-supply gap towards the week ending 17 March 2023. The weakening of export demand amidst high stock volumes also contributed to the current price momentum of PVC in China.

Similarly, the modest prices of PVC in the Indian market were concluded from the stagnancy in the downstream construction and household sectors and sufficient availability of stocks. The spiking home prices and rising interest rates weighed on the buying sentiments in the country and led the real estate demand for PVC on a southward movement.

As per the ChemAnalyst, PVC prices are anticipated to rise in the APAC market, as resilience in the export of new offers is expected, along with a revival in the domestic consumption in the downstream construction and household segments of the region. On the Supply-side, several new installations are expected in March 2023 to be put into production with the recovery of profits, and output is also likely to be relatively high in the region at the termination of March 2023.