PVC: Strong Oscillation, High Inventory Restricts Upside Potential
In the previous trading day, the main PVC futures contract dropped 1.48%, with spot prices in East China falling 80 CNY/ton and the basis remaining stable. The core market game lies in the interplay between raw material supply concerns driven by overseas geopolitics, the launch of domestic spring demand and high inventory. Supported by solid short-term costs, PVC prices trade strong in oscillation while upside potential is strictly capped by high inventory.
On the supply side, the operating rate of ethylene-based PVC plummeted due to high costs, forming expectations of structural tightening. Downstream pipe and profile operating rates rebounded seasonally but remained low, with procurement limited to rigid demand and weak market driving force. Middle East geopolitical tensions pushed up crude oil and ethylene prices, providing a firm floor for PVC. The industry is still in an inventory build-up phase: social inventory stood at 1.4038 million tons (+3.76% MoM) and enterprise inventory at 458,400 tons (slightly up MoM), with inventory growth mainly from social stockpiles.
Bolstered by costs and spring demand, PVC is unlikely to see a sharp drop. Medium-term focus is on inventory destocking and the pace of demand recovery.Outlook: Strong oscillation, upside capped by high inventory.
PP Polyolefins: Fading Cost Support, Focus on Short-Selling Opportunities
In the previous trading day, PP quotations in Hangzhou edged up, with mainstream fiber drawing grade prices at 8,950-9,050 CNY/ton; merchants tested higher offers with negotiable actual transactions. LLDPE prices in Yuyao adjusted by 50-200 CNY/ton, moving with the market and open for negotiation based on order volume.
Geopolitical tensions lifted costs, and volatile futures led spot prices to trade at high levels. The industry operating rate declined, forcing enterprises to cut production loads. More plastic manufacturers shut down for maintenance, pushing capacity utilization down to around 80% and tightening supply; PP manufacturer inventory fell MoM last week. Downstream operating rates rebounded, with buyers gradually accepting high prices and conducting small-scale stock replenishment on dips. The market was dominated by digesting low-cost inventory, with a rise in basis trading.
With easing geopolitical tensions and fading cost-driven momentum, polyolefin prices are expected to pull back.Strategy: Focus on short-selling opportunities for polyolefins.
Chemdo: Navigate Plastics Market Volatility for Global Partners
Post time: Mar-27-2026