crashofthetitansps4| Increase in overhauls in the PVC industry: supply is reduced, demand is sluggish, and high inventory shocks intensify

News summary

PVC industry affected by maintenance, construction fellcrashofthetitansps4, high social inventoriescrashofthetitansps4, going to the warehouse slowly. The performance on the demand side was flat, spot prices rose, and downstream replenishment was not active. The macro commodity environment has improved and PVC prices may move upwards, but attention needs to be paid to the recovery of downstream demand and policy impact.

Newsletter text

[PVC market overhauls increase, operating rates decline] This week, production in the PVC industry was affected by overhauls, and the industry's operating rate declined. It is expected that new overhauls and some continued overhauls next week will accelerate the decline in operating rates. However, the absolute value of current social inventories is higher than the same period last year, and the destocking process is not fast. [Domestic demand is stable, spot prices are rising] Domestic demand for PVC remains stable, and spot prices have recently increased. Downstream companies generally choose to replenish stocks when prices are low and are not willing to chase prices. [Exports are restricted, and there is a strong wait-and-see attitude] After the price increase of Formosa Plastics, some of the export quotations of domestic companies followed suit. However, overseas markets have a strong wait-and-see attitude, and it is difficult for export volume to increase significantly in the short term. However, in the long run, the export market still needs to be further observed. [Terminal procurement on demand, inventory dropped slightly] The terminal market continued to purchase based on demand, and the inventory of sample warehouses in East and South China decreased slightly during the week. [Futures lead spot, basis weakens] This week, futures rose more than spot, causing the basis to decline, and futures prices remain at a premium. [The PVC market is driven by funds in the short term, but demand improves in the long term] Affected by real estate-related news and improved macroeconomic commodity atmosphere, the PVC market is driven by financial sentiment in the short term and has strong fluctuations. Although the supply side has decreased due to maintenance, the performance of the demand side is still weak and inventories are still at high levels. Once market sentiment falls back, the PVC market will return to fundamentals, and improvement on the demand side by then will be the key. [Market outlook focuses on three major points] The future development of the PVC market will focus on the recovery of downstream demand, the country's macroeconomic policies and real estate policies, and the status of spring maintenance.