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PVC: the recent decline in supply, but the stages of oversupply is still difficult to reverse

Recently, because of the concentrated maintenance and the load reduction of some production enterprises, the load rate of PVC industry has fallen to a relatively low level, and the supply of PVC has declined. However, as the downstream demand-side fatigue continues, the spot supply in the market is still relatively loose, part of the PVC production enterprises are still facing sales and inventory pressure. The demand side has yet to show any clear signs of recovery, and exports are expected to weaken, the overall supply oversupply in August is expected to continue.

In recent years, the load rate of domestic PVC industry has decreased compared with the previous period, PVC supply has decreased, the current PVC industry to maintain a relatively low load rate at the start of the level.

On the one hand, due to the relatively concentrated maintenance of some large factories in the recent period, the loss of maintenance increased significantly compared with the previous period. In the last two weeks, the theoretical loss of PVC due to parking and maintenance were 63,530 tons and 67,790 tons respectively, reached a relatively high level in the year.

On the other hand, due to the high temperature, loss and other reasons, some enterprises have load reduction, and some enterprises have a large reduction in the start-up load rate, even the temporary parking of individual production enterprises.

Recently, most of the orders of PVC products enterprises are still not good, the orders for products have not improved significantly, the enthusiasm for purchasing raw materials is not high, most of the products enterprises continue to meet the needs of replenishment-based, low acceptance of high prices, part of the time when PVC prices did not see the rise in sentiment. In the past two weeks, the main market of PVC part of the time trading light, the market for traders more trade flow between the source, downstream actual demand is still weak. As can be seen from Figure 4, despite the recent trend of a small amount of PVC social inventory destocking, but the current social inventory absolute value is still maintained at a significantly high level.

In addition to the social inventory absolute value is still maintained in a relatively high level, the recent PVC production plant inventory continued to increase, and the growth rate is relatively large. The contrast 2021 was also significantly higher over the same period.

Although the overall change of pre-sale orders of enterprises in recent years is not large, but some of the production enterprises exist customer order delivery delay, some enterprises factory inventory significantly increased. As a whole, although there has been a small decline in recent social inventory trend, but the decline is significantly less than the extent of the production of factory inventory accumulation. As a result, spot supply in the market remains loose.

Although there has been a significant reduction in supply in the near term, it is expected that the oversupply situation will not be reversed in the short term, based on the expectation of follow-on supply and demand.


Post time: Aug-18-2022