Lead-in: This week, the domestic ethylene dichloride (EDC) market exhibited significant regional divergence, with East China leading price increases while South China remained stable. In East China, spot resources were rapidly exhausted, compounded by rising upstream raw material costs, driving prices sharply higher. Conversely, supply in South China remained relatively ample with no shortage issues, resulting in price gains significantly weaker than those in East China.
I. Sharp Surge in East China Widens Regional Price Gap
This week, the performance of EDC prices in East and South China diverged markedly. The East China market faced a concentrated release of spot supply contradictions: traders held virtually no inventory, domestic producers had orders booked through month-end, and short-term sellable supply was nearly depleted. This tight liquidity directly pushed up market quotations.
A variable emerged on the supply side this Friday, as Shanghai Chlor-Alkali shipments are expected to arrive at East China ports. This could temporarily replenish circulating supply and alleviate the spot tightness. In contrast, the supply-demand balance in South China remained stable with sufficient availability and no shortages, leading to only modest price follow-through and a clear widening of the regional price gap.
On the demand side, downstream vinyl chloride monomer (VCM) prices fluctuated weakly, maintaining primarily rigid procurement without large-scale active stockpiling. The core driver of this rally was supply contraction rather than a substantial recovery in downstream demand. Downstream buyers showed cautious willingness to chase high prices, which constrained further upward momentum. The PVC industry largely relies on rigid long-term contracts, showing declining acceptance of high-priced EDC. Meanwhile, demand in the solvent sector contracted significantly due to prior high prices; downstream enterprises generally maintained low inventories without engaging in pre-holiday concentrated restocking.
In the Jiangyin market (East China), national standard-grade prices rose to RMB 3,250–3,300 per ton (cash basis), marking a week-on-week average increase of 12.93%. In South China, national standard-grade prices increased to RMB 3,150–3,200 per ton (cash basis), reflecting a week-on-week average rise of 6.72%.
II. Short-Term Market Outlook
In the short term, the tight spot situation in East China is unlikely to reverse quickly before the arrival of ship cargo. Prices are expected to remain elevated with volatile fluctuations. The actual volume and absorption rate of the cargo arriving on Friday will be the key variable for next week’s East China market trends. If shipment volumes are low and digestion periods are extended, support for high prices in East China will persist. However, if sufficient supply flows into the market rapidly, alleviating the spot tightness, prices may face downward adjustment pressure.
Supply in South China remains relatively stable with limited supply-demand pressure. The market there is likely to track East China’s movements within a narrow range, with limited volatility. Given that prices have already surged and downstream acceptance remains weak, if subsequent arrivals are concentrated while downstream procurement lags, there is a risk of a pullback from current highs.
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