In August, the supply and demand of PVC improved marginally, and inventories increased initially before declining. In September, scheduled maintenance is expected to decrease, and the operating rate of supply side is expected to increase, but the demand is not optimistic, so the fundamental outlook is expected to be loose.
In August, the marginal improvement in PVC supply and demand was evident, with both supply and demand increasing month-on-month. Inventory increased initially but then decreased, with the month-end inventory decreasing slightly compared to the previous month. The number of enterprises undergoing maintenance decreased, and the monthly operating rate increased by 2.84 percentage points to 74.42% in August, resulting in an increase in production. The improvement in demand was mainly due to low-priced terminals having some inventory accumulation and enterprises' export orders improving in the middle and later part of the month.
The upstream enterprises had poor shipments in the first half of the month, with inventories gradually increasing. In the middle and later half of the month, as export orders improved and some hedgers made bulk purchases, the inventories of upstream enterprises slightly decreased, but the inventories still increased on a monthly basis by the end of the month. The social inventories in East China and South China showed a continuous downward trend. On the one hand, the futures prices continued to decline, making the point price advantage obvious, with the market price being lower than the enterprise price, and the terminal mainly purchasing from the market. On the other hand, as the price fell to a new low for the year, some downstream customers had hoarding behavior. According to the data from Compass Information Consulting, the sample inventory of upstream enterprises was 286,850 tons on August 29, up 10.09% from the end of July last year, but 5.7% lower than the same period last year. The social inventories in East China and South China continued to decline, with the sample warehouse inventory in East China and South China reaching 499,900 tons on August 29, down 9.34% from the end of July last year, up 21.78% from the same period last year.
Looking forward to September, the supply side planned maintenance enterprises continue to decrease, and the load rate will be further increased. Domestic demand is hardly optimistic, and exports still have a certain opportunity, but the probability of sustained volume is limited. So the fundamentals are expected to weaken slightly in September.
Affected by India's BIS certification policy, China's PVC export orders in July were limited, resulting in PVC export deliveries in August, while PVC export orders began to increase significantly in mid-August, but most of the delivery in September, so it is expected that export deliveries in August did not change much from the previous month, while export deliveries in September will continue to increase. For imports, it is still processed with imported materials, and imports remain low. Therefore, the net export volume is expected to change little in August, and the net export volume in September increased from the previous month.
Post time: Sep-05-2024