Core Viewpoint - PVC prices have been under significant pressure due to capacity expansion, hitting a record low in 2025, with prices dropping below 4500 yuan/ton, exacerbated by weak demand and the cancellation of export tax rebates [1][4][8] Group 1: Price Trends and Profitability - PVC prices have consistently declined in recent years, reaching new lows, with production costs not sufficiently supporting prices due to ongoing losses in the calcium carbide method, which exceeded 1500 yuan/ton [4] - The integrated chlor-alkali enterprises have been able to offset PVC losses with caustic soda profits, but as caustic soda prices fell in the second half of 2025, combined profits turned negative, leading to a reduction in PVC production [4] - As production cuts occur, PVC supply pressure eases, allowing for a slight price rebound and some recovery in PVC valuations [4][8] Group 2: Demand Dynamics - The real estate sector, which accounts for 80% of PVC demand, has been in a downturn, with significant declines in sales area (down 15.6%) and sales revenue (down 23.6%) reported in December 2025 [5] - Seasonal demand fluctuations are evident, with PVC demand typically slowing during winter and the Spring Festival, leading to near stagnation in demand as the holiday approaches [5] Group 3: Export Market Changes - Recent policy changes announced by the Ministry of Finance and the State Administration of Taxation will remove the VAT export rebate for PVC products starting April 1, 2026, increasing export costs by approximately 80 USD/ton [6][7] - Despite a significant increase in PVC exports in recent years, with 2024 exports exceeding 2.6 million tons and projected to reach 3.8 million tons in 2025, the cancellation of export rebates is expected to diminish price advantages and limit future export volumes [7][8] Group 4: Future Outlook - While PVC prices have temporarily rebounded, the long-term outlook remains constrained by weak demand and the impact of export rebate cancellations, which may exacerbate domestic supply-demand imbalances and limit price increases [8]

Report Summary 1. Investment Rating - No investment rating for the industry is provided in the report. 2. Core View - PVC supply - demand is weak, but there is cost support. The supply pressure is expected to intensify in October as new follow - up maintenance devices are few, previous shutdown devices restart, and new capacity may be put into production. Downstream demand growth is limited by the weak domestic real - estate market, and the export market is affected by the Indian anti - dumping tax. Inventory is likely to remain at a high level, which is the main source of price pressure. However, due to the deep loss of the calcium carbide process and the contraction of chlor - alkali profits, the lower limit of PVC valuation may rise, providing some support to the price. Technically, attention should be paid to the support around 4719 yuan/ton [3]. 3. Summary by Directory 3.1 Futures Market - The closing price of PVC futures was 4769 yuan/ton, down 70 yuan; trading volume was 708,041 lots, up 116,303 lots; open interest was 1,144,046 lots, up 70,687 lots. The net long position of the top 20 futures holders was - 128,365 lots, down 15,518 lots [3]. 3.2 Spot Market - In the East China region, the price of ethylene - based PVC was 4990 yuan/ton, down 10 yuan; calcium carbide - based PVC was 4715 yuan/ton, down 26.15 yuan. In the South China region, ethylene - based PVC was 4995 yuan/ton, unchanged; calcium carbide - based PVC was 4776.88 yuan/ton, down 34.38 yuan. The CIF price in China was 700 US dollars/ton, unchanged; in Southeast Asia was 650 US dollars/ton, unchanged; the FOB price in Northwest Europe was 715 US dollars/ton, down 5 US dollars. The basis was - 129 yuan/ton, up 10 yuan [3]. 3.3 Upstream Situation - The mainstream average price of calcium carbide in Central China was 2800 yuan/ton, unchanged; in North China was 2751.67 yuan/ton, down 8.33 yuan; in Northwest China was 2590 yuan/ton, unchanged. The mainstream price of liquid chlorine in Inner Mongolia was - 350 yuan/ton, unchanged. The mid - price of VCM CFR Far East was 513 US dollars/ton, unchanged; VCM CFR Southeast Asia was 546 US dollars/ton, unchanged. The mid - price of EDC CFR Far East was 189 US dollars/ton, unchanged; EDC CFR Southeast Asia was 201 US dollars/ton, unchanged [3]. 3.4 Industry Situation - The operating rate of PVC was 78.97%, up 2.01 percentage points; the operating rate of calcium carbide - based PVC was 82.13%, up 2.8 percentage points; the operating rate of ethylene - based PVC was 79.75%, up 1.62 percentage points. The total social inventory of PVC was 53.77 million tons, up 0.3 million tons; in the East China region, it was 48.84 million tons, up 0.5 million tons; in the South China region, it was 4.93 million tons, down 0.2 million tons [3]. 3.5 Downstream Situation - The National Real Estate Climate Index was 93.05, down 0.29. The cumulative value of new housing construction area was 39,801.01 million square meters, up 4595.01 million square meters. The cumulative value of real - estate construction area was 643,108.94 million square meters, up 4377.94 million square meters. The cumulative value of real - estate development investment was 31,693.94 billion yuan, up 3588.01 billion yuan [3]. 3.6 Option Market - The 20 - day historical volatility of PVC was 11.51%, up 1.14 percentage points; the 40 - day historical volatility was 10.17%, up 0.46 percentage points. The implied volatility of at - the - money put and call options was 15.07%, up 0.33 percentage points [3]. 3.7 Industry News - From September 20th to 26th, China's PVC capacity utilization rate was 78.97%, up 2.01% from the previous period. From September 19th to 25th, the downstream operating rate of PVC decreased by 1.43% to 47.76%, with the pipe operating rate up 1.3% to 40.43% and the profile operating rate down 0.52% to 38.91%. As of September 25th, PVC social inventory was 97.13 million tons, up 1.84% from the previous period. From September 19th to 25th, the average cost of the calcium carbide process rose to 5312 yuan/ton, and the profit decreased by 127 yuan/ton to - 657 yuan/ton; the average cost of the ethylene process decreased to 5602 yuan/ton, and the profit increased by 7 yuan/ton to - 645 yuan/ton [3].

Group 1 - The domestic PVC powder market is experiencing a slight downward adjustment in spot prices, with overall trading activity remaining subdued due to low downstream purchasing enthusiasm [1] - As of May 29, the overall operating rate for PVC powder is 74.60%, an increase of 1.49 percentage points month-on-month, with the calcium carbide method at 75.71% and the ethylene method at 71.71% [2] - Social inventory of PVC has decreased by 4.12% month-on-month to 597,600 tons, a year-on-year decline of 32.78%, with East China holding 544,700 tons and South China 52,900 tons [2] Group 2 - The long-term outlook for PVC indicates a prominent supply-demand imbalance, primarily due to a declining trend in the domestic real estate sector, which negatively impacts end demand [3] - Short-term supply pressures are expected to increase in June due to planned maintenance and new installations coming online, while domestic demand remains weak [3] - Overall, the supply-demand pressure may marginally increase in June, with PVC prices expected to operate within the range of 4,500 to 5,000, although current absolute prices are considered low [3]

Group 1 - The domestic PVC powder market has seen a slight decline in spot prices, with traders reporting some downward adjustments, and overall market transactions are sluggish due to low purchasing enthusiasm from downstream buyers [1] - As of May 1, the overall operating rate of PVC powder is estimated at 76.50%, an increase of 0.83 percentage points month-on-month, with the calcium carbide method at 77.27% and the ethylene method at 74.52% [2] - As of April 30, social inventory of PVC has decreased by 4.94% month-on-month to 653,700 tons, a year-on-year decrease of 25.02%, with East China at 601,600 tons and South China at 52,100 tons [2] Group 2 - The supply-demand imbalance for PVC is becoming more pronounced, with weak demand in the real estate sector and insufficient domestic demand, while exports in the first quarter were supported mainly by price adjustments [3] - The oversupply issue in the PVC market is unlikely to see effective alleviation, and prices are expected to remain weak, with recommendations to adopt a bearish stance on high prices [3] - Potential risks include concentrated maintenance periods and limited year-on-year inventory pressure, which could lead to a rebound in prices if policy stimuli occur [3]