I. Weekly Market Overview: Range-Bound Consolidation with Solid Cost Support

During the week, the domestic PVC paste resin market exhibited a generally stable trend with minor localized fluctuations. As of September 17, average regional prices for leather-grade and glove-grade materials remained virtually unchanged compared to the previous week, with actual market transactions operating predominantly on a negotiated, order-by-order basis.

From a macro perspective, supply and demand fundamentals remained soft:

• Cost Side: High raw material prices provided strong bottom support, preventing spot market prices from declining and reinforcing producers' intent to hold offer levels firm.

• Demand Side: Weak downstream consumption limited buyer acceptance of higher-priced materials, keeping market activity strictly confined to hand-to-mouth restocking.

II. Analysis of Key Market Dynamics

1. Supply Side: Regional Operating Adjustments, Slight Dip in Overall Utilization

   Production trends varied across regions during the week. Facilities in Northwest China that underwent maintenance earlier resumed operations, while select plants in East China paused production to focus on inventory drawdown. As a result, the industry's overall operating rate experienced a minor pullback; however, spot supply reserves remained ample, causing minimal disruption to total market availability.

2. Cost Side: Elevated Raw Material Prices Pressure Margin Profiles

   Sustained strength across upstream feedstocks drove production costs higher across both manufacturing routes:

   • Ethylene Route: High upstream ethylene prices and rising Vinyl Chloride Monomer (VCM) ex-factory quotes increased pressure on ethylene-based producers, compressing profit margins close to breakeven levels.

   • Calcium Carbide Route: Upward movement in calcium carbide prices continually passed cost pressure downward, further squeezing the gross margins of carbide-based production.

3. Demand Side: Weak Downstream Sentiment Keeps Restocking Rigid

   Downstream operating rates remained constrained by subdued terminal demand. Buyers showed resistance to higher-priced spot offers, adhering strictly to a "buy-as-you-go" strategy without significant inventory buildup. On the export front, shipments were dominated by fixed long-term contracts, providing limited relief to domestic inventory absorption.

III. Short-Term Market Outlook

Looking ahead, market developments will be shaped by the interaction between upstream cost dynamics and downstream purchasing behavior:

• Production & Supply: With minimal scheduled plant maintenance expected in the coming week, major production units are projected to maintain stable operations, keeping market supply steady and sufficient.

• Raw Materials & Costs: Pre-holiday inventory buildup by downstream calcium carbide consumers, combined with localized peak-shaving operational limits, may support further upward pressure on calcium carbide quotes. Meanwhile, ethylene prices are expected to stay elevated, leaving little room for VCM price reductions and maintaining strong cost support for PVC paste resin.

• Demand & Purchasing: In the absence of major demand drivers, a surge in purchasing volume remains unlikely. Downstream buyers are expected to continue rigid, essential-only procurement with limited willingness to chase higher prices.

Summary: The interplay between strong cost support and sluggish demand will continue to define market dynamics in the near term. While significant price drops are unlikely due to firm cost floors, upward momentum remains capped by weak consumption. The PVC paste resin market is expected to remain stable in the coming week, with actual transaction terms open to flexible negotiation.