PVC Futures Surge Postnoon Today
PVC Futures Analysis: On July 25th, the PVC 2509 contract price primarily consolidated within a narrow range at a high level in the evening session, with minimal price fluctuations. This trend continued in the morning session, but the price suddenly surged in the afternoon, breaking through the highs.
The V2509 contract opened at 5240, reached a high of 5391, and a low of 5226, with a spread of 151. Opening prices increased by 28,479 lots, with open interest of 860,317 lots. The settlement price was 5291, compared to yesterday's settlement price of 5207, an increase of 84. Daily trading volume was 1,863,851 lots, with deposits of 3.236 billion yuan and inflows of 186 million yuan.
Regional Price Summary: Yuan/ton
PVC Spot Market: Mainstream transaction prices in the domestic PVC market continued to rise at high levels, with a second increase in the afternoon. Comparing price estimates: prices in North China rose by 60-80 yuan/ton, in East China by 60-70 yuan/ton, in South China by 60-70 yuan/ton, in Northeast China by 60 yuan/ton, in Central China by 80 yuan/ton, and in Southwest China by 50 yuan/ton.
Ex-factory prices at upstream PVC manufacturers remained stable in some cases, while others saw slight increases ranging from 40-50-80 yuan/ton. Upstream companies were relatively proactive in responding to price increases. Futures prices were trading at high levels, with spot market quotations seeing a slight increase of 30-50 yuan/ton in the morning.
Futures prices surged in the afternoon, with some spot markets closing and others experiencing a second increase. Basis spreads widened slightly, with basis quotes for the 09 contract in East China ranging from 100-180-200, in South China from 60-100, in North China from 400-450-500, and in Southwest China from 300-460-600. Despite the significant price increase, spot market activity was sluggish, and inquiries at high prices were low.
PVC Market Forecast:
Futures: PVC 2509 futures prices remained within a narrow range during the night and morning sessions, but prices rose significantly in the afternoon, reaching a high of 5391, touching the monthly resistance level, resulting in a sudden surge. Unlike previous days of declining positions, today's surge in positions reflects bullish sentiment. Trading activity showed a 25.4% increase in long positions compared to a 24.3% decrease in short positions. Technically, the Bollinger Bands (13, 13, and 2) diverged significantly. The daily KD and MACD lines formed a clear golden cross, resulting in a positive closing. Market sentiment has also shifted. In the short term, futures prices will focus on the 5400 resistance level. If a breakout occurs, the market could enter the upper range of 5400-5500.
Spot: The sharp rise in futures prices in the afternoon was relatively sudden in the industry. First, the fundamental supply and demand of PVC has not changed significantly, and high prices have severely suppressed demand. Spot traders reported poor trading during the week, but upstream factories have actively adjusted prices, shifting the pressure of price absorption to intermediaries.
Furthermore, the price adjustments in the spot market were significantly smaller than those in the futures market. However, fluctuations driven by sentiment far outweigh fundamentals, resulting in a passive upward movement in PVC spot prices.
Putting aside the current fundamentals, judging by the upward momentum in both the futures and spot markets, if the dual-coke market continues to simmer, PVC futures may see further capital inflows. However, caution and rationality are advised. Overall, spot market prices are likely to remain strong in the short term.
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