I. Price Trend
This week (February 2–6), domestic PVC prices continued their upward trend. According to the Business Society commodity analysis system, the weekly increase for PVC calcium carbide-based SG-5 was 1.10%. The price rise was primarily driven by futures market momentum, with insufficient fundamental support, resulting in a divergence pattern of "strong futures, weak spot prices." Toward the weekend, overall sentiment in the commodity futures market waned, with most commodity prices experiencing a weak correction, leading to a halt in the rise and a subsequent decline in the PVC market. Business Society data indicates that the current market price for PVC calcium carbide-based SG-5 in East China is in the range of 4,750–4,800 RMB/ton.

II. Market Analysis
Supply and Demand:
This week, the supply and demand fundamentals in the PVC spot market were weak. However, driven by the futures market, spot prices surged at the beginning of the week. Despite this, supply and demand performance remained weak, with downstream demand sluggish and export volumes declining. Additionally, on the supply side, PVC operating rates slightly decreased this week, with some enterprises operating below 50% capacity. Consequently, toward the weekend, PVC prices underwent a correction against the backdrop of pressure in the futures market. This was also influenced by declining trading volumes and shifting market sentiment.

In terms of inventory, as the Chinese New Year approaches, the holiday atmosphere is intensifying, leading to a slight slowdown in downstream procurement. Social inventories remain at medium-to-high levels. Considering the substantial base inventory, the supply side of the PVC spot market remains relatively ample.

Cost Side:
This week, calcium carbide market prices rebounded from low levels, returning to an upward trajectory. According to Business Society monitoring, calcium carbide prices increased by 0.39% this week. The increase in downstream procurement provided some stimulus, and cost advantages continue to support PVC prices.

III. Future Outlook
Supply Side:
Slight Increase in Operating Rates, Moderate Rise in Supply Pressure
Next week, domestic PVC industry operating rates are expected to rise slightly, primarily due to the gradual resumption of maintenance units—such as Fujian Wanhua and Shandong Hengtong—which are set to restart, leading to an anticipated increase in supply. However, overall, as the Chinese New Year approaches, most enterprises will maintain their current operating pace, with no large-scale expansion expected. Supply pressure is projected to increase moderately, exerting limited downward pressure on prices.

Demand Side:
Domestic Demand Enters Off-Season, Export Expectations Decline
On the domestic front, downstream PVC enterprises will gradually enter a shutdown mode for the holiday, with operating rates continuing to decline. Terminal procurement demand will further shrink, making it difficult to provide effective support for spot prices. On the export front, the March PVC contract prices for the Asian market will be officially announced next week. Currently, market sentiment is cautious, with most foreign trade enterprises adopting a wait-and-see approach. It is expected that export order volumes will continue to decline, making it challenging to alleviate domestic inventory pressure.

In summary, Business Society believes that the PVC market will gradually enter an adjustment phase ahead of the Chinese New Year holiday closure next week. The slight increase in operating rates and the continued weakening of demand will create a tug-of-war, while the cost side remains generally stable, and futures market sentiment tends to ease. The market is expected to adopt a wait-and-see approach with stable prices, operating within a narrow range of fluctuations. Key factors to monitor include the progress of maintenance unit restarts and the pace of downstream procurement.