In Q3, China’s PVC paste prices first remained stable and then saw a downward trend, with a slight rebound at the end of the quarter. The average price in Q3 dropped compared with Q2. As of September 27, mainstream dealing prices of general material in East China hovered at RMB 7,150-7,850/mt, with an average quarterly price of RMB 7,771/mt, down 0.55% from Q2 and 4.87% YoY. The highest price was RMB 8,125/mt in early-July, and the lowest one was RMB 7,350/mt in end-September. In North China, glove material prices hovered at RMB 7,500-7,800/mt, with an average price of RMB 7,885/mt, down 0.30% from Q2 and 2.79% YoY. The highest price was RMB 8,125/mt in early-July, and the lowest one was RMB 7,600/mt in end-September.

Although PVC paste producers concentrated their maintenance in July and August, leading to a reduction in industry operating rates, demand remained weak. Downstream product manufacturers faced poor orders, and the combination of high temperatures and heavy rains in southern China further affected operations, reducing their enthusiasm for purchasing feedstock. In H1 September, the expected peak demand season in the domestic market did not materialize, and export orders from downstream industries underperformed. Due to India’s anti-dumping measures, exports to the country were nearly halted, and China’s PVC paste producers faced sales pressure. General-purpose PVC paste prices continued to decline, while glove-grade demand remained stable, resulting in little price movement. In late September, as downstream industries began restocking ahead of the National Day holiday, with no significant inventory pressure on the supply side, and macroeconomic policies including interest rate cuts, loan rate reductions, and various innovative support tools announced by the State Council Information Office, market sentiment was boosted. PVC paste prices rebounded slightly, and market transactions improved.

In Q3, Some PVC paste producers concentrated their maintenance activities, resulting in a decline in industry operating rates.

As of September 26, the operating load for the PVC paste industry stood at 68.60%, a 5.63 percentage point drop compared to Q2. The ethylene-based PVC paste industrial operating rate was 54.86%, up 0.97 percentage points QoQ. From July to August, PVC paste units underwent intensive unit maintenance, propping up the output loss. In September, with the unit restart, the PVC paste output rose gradually. PVC paste output in Q3 was around 284.4kt, down 6.14% QoQ. Though most PVC paste producers faced no inventory pressure, they faced sales pressure due to soft demand. Thus, PVC paste prices saw a downward trend.

In Q3, glove-grade demand was passable, and general-purpose demand was average.

In Q3, the operating levels of downstream PVC glove manufacturers remained relatively stable, with 460-500 production lines in operation. In July and August, glove-grade downstream enterprises mainly purchased on a need-to basis. In September, export orders for glove products saw a price decline, leading to reduced operations at some small and medium-sized glove manufacturers, while large manufacturers slightly increased their production lines. PVC glove exports in July and August amounted to 8.416 billion pairs, representing a 30.65% YoY increase.

For general-purpose PVC, downstream demand in Q3 was tepid. July and August, being traditionally low-demand months, saw weak orders and operations in industries like leather and foam materials. High temperatures and heavy rainfall in the southern region further weakened production activity. Procurement of feedstock was mainly limited to essential needs. Despite September being the start of the traditional high-demand season, orders in some downstream sectors showed no improvement. The coated fabric industry was driven by short-term orders, with no long-term export orders placed. The toy industry experienced mixed demand and operations, while other general-purpose PVC sectors showed mediocre demand overall. In the first half of September, demand remained weak. However, by the second half, restocking ahead of the National Day holiday led to a short-term improvement in demand as downstream manufacturers entered the market for bulk purchases.

Exports decreased weighed on domestic sales pressure.

Due to the preliminary anti-dumping ruling issued by India’s Ministry of Commerce and Industry on April 26, 2024, targeting PVC paste resin from mainland China, Korea, Malaysia, Norway, Thailand, and Taiwan, exports to India began to decline significantly from May and June, with nearly no shipments in July and August. China’s PVC paste exports in July and August 2024 totaled 15.7kt, a 41.96% YoY decrease. With weak export demand, China’s PVC paste manufacturers continue to face pressure in the domestic market.