China PVC Profile Industry Operating Rate Inched up in May 2024
Preface: Operating rates at PVC profile enterprises rose slightly in May. Most of them mainly engaged in bargain-hunting amid tepid orders.
In May, operating rates at PVC profile enterprises rose slightly from April. According to SCI’s data, the overall operating rate at 20 sample profile enterprises was 28% in April, up 1 percentage point M-O-M.
Most profile enterprises kept operating rates stable, while several raised operating rates. The real estate market was in the doldrums, failing to prop up the demand for profiles. Most profile enterprises saw limited orders, while several held operating rates at 50%-60% backed by export orders. Operating rates at large-sized enterprises hovered at 40%-60%, while those at medium-sized enterprises hovered at 30%. Several small-sized enterprises halted production due to scarce orders.
Weak China’s domestic consumption and limited orders were the main reasons for the lower-than-expected PVC profile industrial operating rate. China’s real estate industry, which is in the adjustment phase, underperformed. Around 60% of the end products of PVC powder are used in real estate-related industries, so the demand for PVC is closely related to the operation of the real estate industry. From Q3, 2021, the real estate industry has entered an adjustment cycle, and relevant data has begun to move downward. Entering 2023, the real estate market showed a certain improvement, mainly reflected in the continuous positive Y-O-Y cumulative growth of the floor space of completed buildings. However, the investment and new startup data underperformed. In 2024, data related to the real estate market still underperformed.
In May, positive real estate market-related policies were implemented. Lowering the personal housing provident fund loan interest rate, abolishing the lower limit of the loan interest rate, lowering the down payment ratio, and the government’s purchasing of some commercial houses with reasonable prices boosted market sentiments. Therefore, PVC powder rebounded. However, positive real estate market-related policies failed to prop up related data and gave limited support to the demand for PVC.
In June 2024, PVC profile enterprises can hardly increase operating rates further. Hot weather may impair some units’ loads. Downstream enterprises may mainly purchase on a need-to basis.
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