PVC China: Weekly Briefs

PVC rallied and then reversed last week, and the main contract is still hovering at elevated levels. The core driver of the recent advance was the geopolitical premium from escalating Middle East tension, which has kept volatility across the energy-and-chemicals complex high. But persistently high energy prices are lifting inflation expectations; the latest US inflation print raised market odds of a Fed hike next week and commodity sentiment turned weaker. On top of that, coal prices rolled over in the second half of the week, loosening cost support, and the main contract came under pressure.