NAV

Summary: During the week of March 20–26, 2026, the domestic PVC Paste Resin (Paste PVC) market experienced significant upward momentum. Driven by the continuous escalation of geopolitical tensions in the Middle East and rising energy costs, market prices reached new stage highs. Wuxi High Mountain provides a comprehensive analysis of the supply, cost, and demand dynamics shaping this week’s performance and the outlook for the coming days.

1. Market Overview: Significant Price Appreciation

The Paste PVC market trended upward this week as global energy volatility exerted heavy pressure on production costs.

According to industry monitoring data as of March 26:

• Paste PVC (Leather Grade): The average market price hit 8,179 RMB/ton, up 455 RMB/ton from last week, representing a 5.89% increase.

• Paste PVC (Glove Grade): The average market price reached 8,297 RMB/ton, up 505 RMB/ton, a 6.48% increase.

Manufacturers primarily adjusted their quotes upward, with some showing a strong "reluctance to sell" at lower levels. Market transactions were largely conducted on a "case-by-case" negotiation basis, with the transaction center steadily shifting higher.

2. Deep Dive into Core Industrial Variables

Supply Side: Divergent Operating Loads

The domestic Paste PVC industry operated at an average capacity of 62.20% this week. While total supply remained relatively stable, internal structural shifts were observed:

• Ethylene-based Process: Several units underwent early maintenance due to depleted feedstock inventories, caused by extended international supply cycles.

• Calcium Carbide-based Process: These units maintained stable operations. Despite scheduled maintenance at some plants in Anhui, the overall impact on market supply remained within a manageable range.

Cost Side: Cumulative Pressure

Cost support was the most prominent driver of price hikes this week. The geopolitical climate triggered a clear transmission along the chemical chain:

• VCM Prices: Ex-factory VCM prices rose by 200 RMB/ton, creating a direct upward push for downstream Paste PVC.

• Calcium Carbide Prices: Continuous gains in the calcium carbide market increased capital pressure for manufacturers relying on external raw materials. In contrast, enterprises with integrated "coal-to-carbide" chains maintained better profitability due to energy self-sufficiency.

Demand Side: Resistance to High Prices

In contrast to the aggressive cost side, the demand sector showed a more cautious response:

• Limited Acceptance: Downstream factories prioritized consuming their existing raw material inventories and displayed significant resistance to the rapid price jumps seen this week.

• Slow Finished Goods Turnover: Tepid terminal market conditions led to slower-than-expected inventory depletion for finished products, causing buyers to limit procurement to immediate, small-scale needs.

3. Market Forecast: Evolution of Logistics and Trends

Looking ahead to the next week (late March to early April), the Paste PVC market will enter a deeper phase of tug-of-war between cost support and demand constraints.

• Production & Supply: No new large-scale maintenance is scheduled for next week. However, due to potential shortages of ethylene-based feedstocks, some plants may lower their operating loads. We expect the overall industry operating rate to hover around 60%.

• Raw Materials & Costs: Improved profit margins may incentivize calcium carbide producers to accelerate their return to full production. Consequently, supply may increase next week, posing a risk of slight price corrections. Nonetheless, overall integrated costs for many producers will remain notably higher than historical averages.

• Demand Outlook: As downstream operating rates recover and inventories are further depleted, we anticipate a moderate release of restocking demand. Market activity is expected to shift from "wait-and-see" to a "gentle recovery" led by essential procurement.

4. Conclusion and HM Strategic Advice

Overall, the complexity of the international landscape suggests that feedstock shortages are unlikely to be fully resolved in the short term. This reinforces the "easy to rise, hard to fall" characteristic of Paste PVC quotes.

HM Perspective: Given the limitations in downstream price absorption, the market may see some manufacturers offering "hidden discounts" or volume-based incentives to maintain turnover. We expect the market to remain firmly positioned on the stronger side, with price adjustments likely capped between 100–200 RMB/ton due to demand-side pressure.