Industry information: The supply of PVC is reduced, and the demand is flat

The scale of maintenance has increased, the inventory has been eliminated, and the bottom of the cost in the early stage may be possible, but there is no possibility of upward movement in chlor-alkali, and the bottom of the market is still obvious. In the later stage, it is not ruled out that losses will cause production companies to reduce their burdens.

Recently, the center of gravity of the PVC market price has moved down, and the operating range is 6000-6180 yuan/ton, which is 20-50 yuan/ton lower than the high and low end of last week's forecast range. Exports were blocked, and prices showed a slow downward trend during the week, testing the lower support.
 

In terms of supply, the operating rate of the PVC industry remained at around 74.5%, and the scale of enterprise maintenance gradually increased after mid-April. The supply of PVC is expected to show a downward trend, but Fujian Wanhua is expected to reach mass production in mid-to-late April, with a daily increase of more than 1,000 tons , production is reduced or limited.

 Trend Chart of PVC Capacity Utilization Rate from 2019 to 2023

In terms of inventory, last week, the warehouses of PVC production enterprises decreased by about 0.65% month-on-month; they increased by 83.97% year-on-year. In the next three weeks, inventory may be slowly destocked, and it will take a long time to destock high inventories.
 

In the export market, the expected decline has expanded from 30 to 50 US dollars. Ramadan in India lasts until the end of April. The U.S. quotations are lowered while seeking deals abroad, creating competition and pressure on the domestic market. Ethylene process companies followed up their exports in a timely manner, maintaining long-term customer orders, and signing orders is acceptable; calcium carbide process still has no price advantage due to its shipping policy, and turned to Southeast Asia, Africa and other places to seek cooperation, but little progress has been made. In the later stage, we will maintain the price-for-volume exchange.

In terms of cost, the industry chain is still at a loss, but profits have been restored due to the fall in coal prices, but there is room for calcium carbide to fall back in the face of shrinking demand in the later stage. The center of gravity of PVC prices has shifted downwards, and the spring inspection can only stop falling under the pattern of strong support at the beginning of 6, and the large inventory continues to exert downward pressure. The decline in the price of chlor-alkali liquid chlorine has led to the profit being locked to around 300 yuan/ton, and the up and down space in the later period is small. The cost of ethylene method is limited by the firmness of ethylene raw materials, which is temporarily stable, and there is an upward expectation after the middle of the month.

In the short term, the supply continues to decrease, but the magnitude is not enough to drive the bullish sentiment of PVC with large stocks. The superimposed month-to-month change is weak in the summer off-season. It is expected that the East China spot will run in the range of 5900-6050 yuan/ton.
 

In the medium and long term, the scale of maintenance will increase, inventory will be eliminated, and the bottom of the cost in the early stage may be possible, but there is no possibility of upward movement in chlor-alkali, and the bottom of the market is still obvious. In the later stage, it is not ruled out that losses will cause production companies to reduce their burdens

HAODIBAN is a Chinese flooring company, focusing on R&D, production and sales of high-quality flooring products. We have rich experience in foreign trade. Up to now, our flooring has been sold to many regions around the world, and we have achieved friendly cooperation with many customers. In the future, we look forward to achieving friendly cooperation with more customers.