Affected by the continuous downturn in demand in the second quarter, the shipment of PVC production enterprises was blocked. Although the maintenance equipment increased and the inventory of production enterprises decreased, the social inventory declined slowly and remained at a historical high, and the PVC Spot market fluctuated and declined.
However, Pvc Resin export orders rose in July. Superimposed by the favorable macro and real estate expectations, the PVC Resin Spot market rebounded, but it was in the slack season of demand, and the weak pattern of domestic market demand remained unchanged, inhibiting the rebound space of the Spot market.
Export order increase
PVC powder export orders increased in July, mainly concentrated in the Indian market. On the one hand, India is less affected by the rainy season; On the other hand, the planned maintenance of some devices in the United States from August to September has led to expectations of a decrease in foreign PVC supply. The Indian market has a strong demand for restocking in the off-season, but in late July, the growth rate of PVC production companies signing orders decreased month on month. In the later stage, attention will be paid to the sustainability of restocking in the Indian market.
Inventory decline in production enterprises
In the second quarter, there were many PVC maintenance devices, and the demand for PVC resin exports increased in July, resulting in a downward trend in inventory of PVC production enterprises.
The weak demand pattern in the domestic market remains unchanged
The domestic market demand for PVC powder price continues to be weak, and real estate data is difficult to improve. PVC product enterprises continue to operate weakly, while orders for flooring, pipes, and profiles enterprises are weak, with most of the construction starting from 40% to 50%. Downstream enterprises' PVC inventory days are at a low level.
Slow decline in social inventory
The domestic PVC market demand continues to be weak, with a decrease in PVC powder maintenance devices and a high social inventory of PVC resin.
In terms of supply, there has been a decrease in the number of new maintenance devices for PVC resin . The initial maintenance devices are planned to be put into operation, and the Shaanxi Jintai new production capacity of 300000 tons is planned to be put into operation and test run in August. There is an expectation of an increase in PVC production.
In terms of cost and profit, the Northwest carbide method PVC resin still has profits, and the enthusiasm for reducing the load of the device is low. The profit of PVC+chlor alkali produced by the carbide method in Shandong Province still has a loss, but the extent of the loss has decreased, and there is a risk of increasing the load of the device in the later stage.
To sum up, the PVC resin output is expected to rise, the domestic market demand is weak, and the social inventory is high. However, the planned maintenance of foreign PVC powder drives the increase of export demand, and the macro and real estate policies are still expected to be favorable. It is expected that the PVC resin Spot market will fluctuate at a high level. Pay attention to the economic policy at the end of July. If it is not as expected, the PVC resin Spot market will still be weak if the speculative replenishment of the Indian market ends.
