This week, the domestic PVC market has experienced strong fluctuations, with the focus of spot prices rising and the futures market following the energy and chemical sector’s upward movement; The core logic of the market trend is that the industry continues to suffer losses, forcing supply contraction and forming a bottom support for upstream costs. However, downstream terminal demand is weak to follow up, and the peak season is insufficient, limiting the sustainability of the upward trend. Overall, it presents a range oscillation pattern of “cost bottoming out and demand suppression”.
1、 Performance of spot and futures markets
On the spot side, the mainstream electric stone method SG-5 warehouse withdrawal spot exchange in East China and Shandong gradually increased from 4800-4900 yuan/ton this week. The mainstream trading range over the weekend was 5050-5100 yuan/ton, and traders followed suit by raising prices by 30-50 yuan/ton. The manufacturer’s quotation was firm, but the actual transactions were mainly small orders for essential needs, and the resistance to high price transactions was relatively high. The price of ethylene based materials is higher than that of carbide based materials, and the price difference is maintained. Due to greater losses, there is a shortage of circulating materials. The SG-5 weekly increase of East China calcium carbide method was 5.02%.
The futures market PVC27 01 contract fluctuated and rose this week, with fund sentiment driven by crude oil and geopolitical news. However, the spot discount structure has not been significantly repaired. After the market rebounded, the industry’s hedging and selling pressure gradually emerged, limiting the upward height.
2、 Trend analysis: Supply contraction outweighs weak demand
Supply side: Loss driven low production, passive production reduction continues
This week, the PVC industry as a whole maintained a relatively low level of production, with an overall load of around 60%, which is in the low range of the year. Calcium carbide method PVC: Outsourcing calcium carbide enterprises continue to suffer losses, and integrated enterprises rely on supporting calcium carbide and caustic soda to reduce costs, but also actively control loads; Partial equipment will continue to undergo periodic maintenance and load reduction, and the resumption period will be extended. Enterprises will control production and reduce output in exchange for price.
The losses of PVC produced by the ethylene method are more severe than those produced by the calcium carbide method, with losses of up to 800 yuan per ton. There are also many long-term shutdowns of equipment, and there is little willingness to resume production, which is the main reason for the decline in production.
Overall, the contraction of supply this week is not due to active production control and price protection, but rather a passive supply reduction caused by cost inversion, which is a bottom support factor, but lacks strong positive effects of active concentration and price support.
Cost side: Calcium carbide is firm, crude oil is high, and the cost base is stable
The quotations in the upstream main production areas of calcium carbide remain relatively stable, supported by the costs of blue charcoal and coal. The potential for a deep decline in calcium carbide is limited. According to data from Shengyi Society, calcium carbide remained stable this week with no fluctuations. Establish a solid cost bottom line for PVC produced by calcium carbide method; International crude oil is fluctuating at a high level due to the geopolitical risks in the Middle East, which has driven the price of ethylene to be strong. The cost pressure of ethylene based PVC continues to exist, which also limits the significant downward space for PVC spot prices. The biggest feature of the cost side this week is that there is a bottom line, but there is insufficient upward momentum, and there is no sustained significant upward trend in the raw material side.
Demand side: Weak demand, not strong during peak season
Downstream pipe and profile construction has been slow to increase, while terminal real estate construction has been sluggish, with investment generally lower than the same period in history; The orders of the product factory are mainly short orders and urgent needs for replenishment. After the price increases, downstream resistance has risen, and the willingness to chase inventory is weak. They generally use and purchase as needed, and dare not stock up. Soft products, sheets, flooring materials, and other downstream products also have limited improvement, resulting in poor order transmission.

In terms of exports, India and Southeast Asia have seasonal procurement expectations, but overseas buyers’ resistance to high priced goods has intensified. This week’s export growth is limited, making it difficult to offset the weak domestic demand. Overall, external demand is stronger than domestic demand. Inventory: Slow inventory turnover, slow pace of turnover
This week, PVC manufacturers and social inventory have shown a double high trend, and the process of destocking is slow. There is currently no sign of rapid or significant destocking in the market. Traders tend to control their inventory and focus on light positions to follow the market trend. They are unwilling to stock up in large quantities, and inventory pressure is only marginally relieved without substantial clearance.
3、 Future prospects
Short term PVC is likely to maintain a high volatility trend: the market is mixed with long and short positions, and the good news comes from the low production volume derived from low production and the high cost brought by crude oil; Negative news comes from the constraints of demand. Follow up focus: changes in prices of calcium carbide and crude oil, progress of PVC plant resumption, degree of downstream start-up recovery, follow-up on export orders, etc.
Overall, there may be limited room for PVC prices to rise in the short term, with a focus on maintaining a high consolidation trend.

Since October, the domestic EVA market has risen step by step. As of October 22nd, the benchmark price of EVA was 11633 yuan/ton, an increase of 5.44% from the beginning of the month at 11033 yuan/ton.
Recently, international crude oil has fluctuated and strengthened, and the prices of raw materials such as ethylene and vinyl acetate have been supported and remain high, with cost support for EVA. As of October 22, the domestic price of ethylene in Sinopec East China is 9400 yuan/ton; As of October 22nd, the market price of vinyl acetate in East China is between 7400 and 7800 yuan/ton.
Since October, there has been strong support for EVA supply, with multiple sets of equipment undergoing centralized maintenance. The industry’s operating rate has fallen to around 60%, and the supply has tightened in stages. Petrochemicals have raised their ex factory prices, foam materials have led the market, and spot prices have rapidly surged.
After the price rises, downstream resistance is obvious. The production of foam shoe materials in the downstream is around 50%, and the production of head rubber film factories is around 5.5%. The overall production is low, and the market only needs to purchase urgently. EVA manufacturers have limited inventory, but the listing is firm, but there has been some relaxation in actual negotiations, and the market has shifted from a unilateral rise to a stable stalemate.
Looking ahead to the future, the current EVA maintenance equipment has not yet fully resumed production, and there is a strong willingness to raise prices under low inventory in petrochemicals. The expectation of photovoltaic materials rushing to work in the fourth quarter provides a bottom line, and EVA prices will remain high in the short term. In the medium to long term, with the gradual return of maintenance equipment and the gradual release of new production capacity in the fourth quarter, the expectation of loose supply in the long term will suppress bulls. If the cost side no longer supports it, EVA prices will fall sharply.

In mid October, the domestic ABS market continued to rise, with spot prices of various grades increasing to a certain extent. As of October 20th, the average price of ABS was 12156.67 yuan/ton, an increase of 7.42% compared to the beginning of the month.
Fundamental analysis
Supply level: As we enter October, the load changes of domestic ABS industry equipment are relatively narrow, and the overall operating rate within the range has been slightly reduced to below 55%. The current weekly average production is within 120000 tons. The inventory position of finished products is relatively low, and has been reduced to less than 190000 tons. The shipment situation of the aggregation plant within the range is still acceptable, and the profit situation is average. The future aggregation plant has limited load reduction operations, and the supply is expected to be stable with a slight decrease. Overall, in mid October, the ABS supply side provided sufficient support for spot prices.
Cost factor: Recently, there has been a tanker fire accident in the waters of the Strait of Hormuz, and the market is concerned about the disruption of waterway traffic. There is a risk of interruption in crude oil transportation, and investors are quickly pricing the supply disturbance risk. The geopolitical risk premium is rising. Combined with the ongoing escalation of the Middle East conflict, market institutions have raised the probability of conflict spread, trading parties have actively increased their long positions in crude oil, and the expected increase in shipping insurance costs has further amplified supply concerns, driving up oil prices. At the same time, the significant decline in US crude oil inventories has provided support, resonating with fundamental and geopolitical news, driving oil prices to break through key pressure levels.
Driven by it, acrylonitrile suppliers continue to raise prices and spot prices remain firm. Upstream propylene prices surged and consolidated, with no expectation of a sharp decline in the short term. At the same time, with the worsening of production losses, it is not ruled out that some units will take measures to reduce production in the future, which will also help increase the price of acrylonitrile. However, due to the current relatively loose supply and the continued mediocre performance of terminal demand, market growth will still be suppressed.
Since October, the domestic styrene market has been fluctuating, with first rising and then falling. The direct upstream pure benzene market price has risen, and the inventory in the main ports of East China is low. Some empty orders for mid month delivery have been replenished, driving the market price center to rise. At the same time, due to the high price of pure benzene and cost pressure, the production of styrene has become increasingly unprofitable, leading to an increase in maintenance and burden reduction enterprises and a decrease in supply. The inventory at the port is also low and the expectation of accumulated inventory is not strong, resulting in a weak overall supply side. Downstream resistance to high priced goods is strong, and the three major downstream loads are operating at low levels. Under the weak supply and demand situation, the market trading atmosphere is weak and prices are falling.
Butadiene is generally oscillating, rising and then falling. In the early stage, domestic spot prices remained relatively high, and the market sentiment of rising prices still exists. However, downstream transaction follow-up was affected by resistance and weakened, and the market subsequently fell under pressure. There is differentiation in regional market conditions, with relatively active supply circulation in Shandong and a stronger wait-and-see atmosphere in the East China market. Overall trading volume is difficult to significantly increase, and there is a more obvious long short game in the market. At present, the cost side is bottoming out at a high level, but the upward drive of butadiene is insufficient. The overall bullish and bearish factors are intertwined, and without sudden equipment maintenance or downstream centralized replenishment benefits, there is little room for a significant rebound in the butadiene market.

In terms of demand, there will be limited changes in the start-up situation of downstream ABS enterprises in mid October. The profit improvement of the main terminal electrical industry is limited, and the buyer camp is resistant to high priced goods, with a tendency to take goods as needed. Intermediary speculation and buying operations are relatively rare, and the willingness to chase price increases in the market is average, with shipments mainly following the market trend. Overall, in mid October, the demand side is dominated by rigid demand.
Future forecast
The domestic ABS market rose positively in mid October. Within the range, the prices of the three raw materials fluctuated, and the overall cost side was relatively strong. The production load of the aggregation plant fluctuates narrowly, and the inventory is low. However, ABS consumption within the range is average, and the unit price profit situation has not improved. The current market trend is focused on the remote cost value, and it is recommended to closely monitor the crude oil market in the future.

1、 Price trend
On October 16th, the average market price of 55% powdered ammonium in Hubei was 3656 yuan/ton, and on October 8th, the average market price of 55% powdered ammonium in Hubei was 3743 yuan/ton. This week, the market price of ammonium phosphate fell by 2.32%.
2、 Market analysis
This week, the market for ammonium phosphate is weak and declining. The price of raw material sulfur continues to weaken, and there is insufficient cost support. Downstream compound fertilizer enterprises purchase on demand, with cautious purchasing intentions and a downward shift in market transaction prices. As of October 16th, the market price of 55 powder ammonium in Hubei region is around 3600-3700 yuan/ton, in Henan region it is around 3700-3750 yuan/ton, and in Sichuan region it is around 3650-3750 yuan/ton.
In terms of raw material sulfur. This week, sulfur prices have continued to be weak, and the market trading atmosphere has been light. Holders of goods are mainly selling. Downstream procurement is cautious and tends to adopt a wait-and-see attitude. Short term sulfur market prices are expected to be weak.
3、 Future forecast
Analysts believe that the recent trend of the ammonium phosphate market is mainly downward. The weakening of raw material prices and cost support, coupled with the approaching end of the autumn fertilizer market, have resulted in poor market demand. It is expected that the short-term market for ammonium phosphate will mainly operate weakly.

This week, the price of raw material propylene remained high, and the price of acrylonitrile continued to rise driven by costs. As of October 16th, the mainstream negotiated price for tank self pickup in the East China market is between 11400-11500 yuan/ton, an increase of 250-350 yuan/ton compared to last week; The mainstream negotiated price for delivery within the Shandong market area is 11150-11350 yuan/ton, an increase of 350 yuan/ton compared to last week.
Loose supply:
During the week, Zhejiang Petrochemical reduced its operating load to 60%, resulting in a decrease in supply. According to statistics, this week (October 9-15), the capacity utilization rate of the domestic acrylonitrile industry reached 72.49%, which is -2.81% higher than the previous cycle; The weekly output is about 86600 tons, which is 0.33 million tons higher than the previous cycle. The fundamental changes within the week are limited, and users purchase according to their needs, while enterprise inventory is basically maintained. As of October 14th, the total inventory of acrylonitrile factories in China is about 45000 tons, which is basically the same as last week.
Average demand:
This week, the capacity utilization rate of major downstream industries has fluctuated, among which the ABS capacity utilization rate was 54.6%, a decrease of -0.6% compared to last week; The capacity utilization rate of acrylic fiber enterprises was 70.38%, unchanged from last week; The utilization rate of acrylamide production capacity was 56.26%, an increase of 0.86% compared to last week.
Cost increase:
During the week, raw material prices significantly increased, and the transmission of industrial chain costs was not smooth, resulting in increased losses for acrylonitrile. According to statistics, as of October 15th, the mainstream closing price of propylene market in Shandong was 10700 yuan/ton, an increase of 405 yuan/ton compared to last week; The average production cost of acrylonitrile is 13357 yuan/ton, with a month on month increase of 5.18%. The average production profit of acrylonitrile during the same period was -2081 yuan/ton, with a month on month decrease of -483 yuan/ton..
Post production forecast: Currently, cost pressures continue to exist, suppliers continue to raise prices, spot prices remain firm, and there is no expectation of a significant drop in the price of raw material propylene in the short term. This will continue to push its price upward. At the same time, as production losses worsen, it is not ruled out that some units will take production reduction measures in the future, which will also help acrylonitrile prices rise. However, due to the continued mediocre performance of terminal demand, market growth will still be suppressed. We should pay attention to changes in the supply side.