In 2024, against the backdrop of prominent supply and demand pressures and weak costs, PVC will perform weakly. The market is generally showing a volatile downward trend. According to the monitoring of Business Society, the total decline last year was 12.13%.

The performance in the first quarter was sluggish, and the overall market showed a narrow range of fluctuations. There were two major market fluctuations during the year: in April and May, due to spring maintenance of supply side equipment and the introduction of real estate stimulus policies; The price of PVC has risen significantly, with an increase of around 500 yuan/ton. At the end of May, PVC prices reached their annual peak, with the highest price exceeding 6000 yuan/ton. The market entered a period of volatile decline from June to August. The second wave of upward trend for the whole year occurred in September and October, mainly due to autumn maintenance and policy factors affecting the rebound of real estate market investment. At the end of the year, the market retreated for two months, and PVC accelerated its downward trend.

Production and demand: The total PVC production in 2024 is approximately 20.4963 million tons, a year-on-year increase of 2.5%. The apparent consumption is about 20.7345 million tons, with a slight decrease compared to the same period. The real estate sector accounts for about 65% of the demand for PVC products, but the sluggish performance of the real estate market has significantly dragged down the demand for PVC.

Capacity change: As of December 2024, the effective production capacity of the PVC industry is 28 million tons. The production plan for 2025 and later includes 200000 tons from Gulf Chemical, 300000 tons from Jintai, 400000 tons from Bohai Development, etc., with a total of 2.5 million tons mainly produced by ethylene method.

Import and export situation: From January to October 2024, the cumulative export volume of PVC powder was 2.171994 million tons, an increase of 13.87% year-on-year; The cumulative import volume was 183200 tons, a year-on-year decrease of 42.68%. The Indian market accounts for about 50% of China’s PVC exports, but the anti-dumping investigation in India has a negative impact on domestic exports.

Outlook for 2025

Supply and demand situation: The contradiction between PVC supply and demand will further intensify in 2025, with a large scale of new production capacity added on the supply side, and downstream demand still facing downward pressure from the sluggish real estate investment situation. Difficulty in reducing midstream inventory, maintaining high levels, and continuing the pattern of excess.

In summary, the PVC market in 2024 is expected to experience low-level fluctuations, with prominent supply-demand contradictions and sustained price suppression. In 2025, the PVC market is expected to continue the situation of oversupply, with prices fluctuating between 4800-6200.

The listing price of Sinopec East China is 6050 yuan/ton, and the listing price of Sinopec North China is 6150 yuan/ton. The Shenghong Refining and Chemical Plant has temporarily shut down, and the overall operating rate of the industry has declined, with an operating rate of 80%. Upstream Sinopec East China pure benzene increased by 150 yuan/ton, and the loss of phenol and ketone further expanded. According to the analysis system of Business Society, the negotiated price reference in the East China market is 6150-6200 yuan/ton, and the negotiated price reference in the South China region is 6200-6250 yuan/ton.

The acetone offers in major mainstream markets across the country on January 14th are as follows:

Region/ Quotation/ Daily increase and decrease

East China region/ 6180./ 180

Shandong region/ 6100./ 50

Yanshan region/ 6150./ 100

South China region/ 6250./ 100

According to the Commodity Market Analysis System of Shengyi Society, in mid January, the domestic market for 85% industrial formic acid remained stable. As of January 13th, the average price was 2950 yuan/ton, an increase of 0.85% from 2925 yuan/ton in the same period last month and a decrease of 6.35% from 3150 yuan/ton in the same period last year.

Raw material end:

The raw material methanol has undergone a narrow adjustment, and the market transaction atmosphere is limited. Downstream demand replenishment is the main trend, and prices remain stable with small fluctuations. The downstream market is still weak, and demand is unlikely to improve. Manufacturers have a positive shipping sentiment.

Demand side:

The downstream pesticide, rubber, leather, and pharmaceutical industries of formic acid are procured based on market demand, with rigid demand being the main focus. This stable downstream demand provides support for the formic acid market.

The formic acid data analyst from Shengyi Society believes that the cost support for formic acid is average, and market transactions are mainly driven by rigid demand. It is expected that 85% of domestic industrial formic acid prices will remain stable in the short term, but specific changes in market conditions still need to be monitored.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of LLDPE (7042) was 8963 yuan/ton on January 3, and the average price was 8850 yuan/ton on January 9, during which the quotation fell by 1.26%.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of LDPE (2426H) was 10516 yuan/ton on January 3, and the average price was 10366 yuan/ton on January 9, with a price drop of 1.43% during this period.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of HDPE (2426H) was 8587 yuan/ton on January 3, and the average price was 8525 yuan/ton on January 9, with a price increase of 0.15% during this period.

The overall polyethylene market is weakening, with prices continuously decreasing. Supply side: There are few planned maintenance devices in the near future, and the production of new devices is gradually increasing. In the early stage, the maintenance devices were restarted, and coupled with the expected arrival of imported goods at the port, the pressure on the supply side continues to increase. Downstream: Downstream product companies mainly need to replenish inventory, with insufficient demand follow-up and strong bearish sentiment in the market. Traders are actively reducing prices and shipping, and some factories have begun preparing for holidays. There is no positive news to boost the macro level. Polyethylene futures are fluctuating, with weak guidance for the spot market.

Both supply and demand are weak, and the support for crude oil on the cost side may weaken next week. It is expected that polyethylene will experience a weak trend of oscillation.

1、 Market price overview

As of January 9th, the benchmark price of melamine in Shengyi Society was 6287.50 yuan/ton, a decrease of -0.55% compared to the beginning of this month (6322.50 yuan/ton).

2、 Market supply and demand situation

1. Supply: In recent years, the production capacity of melamine has gradually increased, especially in the second half of 2024, resulting in a significant increase in the domestic supply of melamine. However, due to the overall poor profit situation in the industry, some manufacturers may choose to reduce production or postpone production, which to some extent alleviates the supply pressure in the market.

2. Demand: The main downstream industries of melamine include sheet metal, impregnated paper, coatings, etc. The development status of these industries directly affects the demand for melamine. In recent years, the real estate market has remained sluggish, leading to insufficient production by downstream enterprises associated with it, resulting in an overall decline in demand for melamine. But with the continuous relaxation of real estate policies and the gradual digestion of the existing market, downstream demand may rebound in the near future.

3、 Inventory and price

1. Inventory situation: Due to weak downstream demand, the inventory pressure of melamine enterprises is gradually increasing. However, due to the relatively controllable overall inventory pressure, the company did not adopt a strategy of large-scale price reduction and promotion, but chose to temporarily stabilize prices until market demand recovers.

2. Price trend: In the first half of 2024, the price of melamine remained relatively stable but showed a weak downward trend. In the second half of the year, with the gradual release of new production capacity and the continued weakness of downstream demand, the price of melamine further fell and remained at a low level. In the near future, with the gradual adjustment of supply and demand, the price of melamine is expected to stabilize or even rebound slightly.

4、 Market outlook

Price fluctuations may continue: Due to changes in supply and demand, production costs, and other factors, the market price of melamine may continue to fluctuate.

Market competition will intensify: With the gradual release of new production capacity and the continued weakness of downstream demand, competition in the melamine market may further intensify.

The export market is expected to expand: Against the backdrop of gradually improving international trade environment, China’s melamine export market is expected to further expand, thereby having a certain impact on domestic market prices.

In summary, the market atmosphere for melamine this week was average, but due to the overall low inventory pressure, prices have temporarily stabilized. In the foreseeable future, with the gradual adjustment of supply and demand and the continuous changes in policy environment, the melamine market is expected to usher in new development opportunities.