China PVC Social Inventory Stays High
Preface: The PVC powder industrial operating rate sees a downward trend in June amid intensive unit maintenance. However, China’s PVC powder industry enters the demand slack season. Though PVC plant inventory moves down slightly, PVC inventory in East China and South China remains high.
The PVC industrial operating rate drops to a low point.
According to SCI, the weekly PVC industrial operating rate was 67.9% up to June 22, up 0.12 percentage points W-O-W. Therein, the operating rate of calcium carbide-based PVC was 67.12%, down 0.12 percentage points W-O-W, while the operating rate of ethylene-based PVC was 70.25%, up 1.08 W-O-W.
In June, the PVC industrial operating rate moves down gradually and dropped to an annual low point in mid-June due to intensive maintenance. In addition, some units underwent unplanned shutdowns. In H2 June, the PVC industrial operating rate inched up with the restart of maintenance units and decreased unit maintenance plans. SCI reckons that the operating rate will rise further. However, hot weather may affect units’ operation, restricting the improvement in the operating rate in the short term.
PVC plant inventory drops slightly.
The declined PVC industrial operating rate drags down the PVC output. A couple of PVC producers mainly sell previous inventory in June. Thus, PVC inventory available for sales sees a downward trend and turned negative, easing pressure on sales. In addition, PVC plant inventory fluctuates downward in line with decreased supply due to increased unit maintenance.
PVC inventory in East China and South China inches up.
In 2023, PVC inventory at sample warehouses in East China and South China remains high, hovering at 400kt-450kt after Spring Festival. Up to June 23, PVC inventory at sample warehouses in East China and South China was 423.5kt, up 1.41% W-O-W and 26.23% Y-O-Y.
Entering June, though the PVC industrial operating rate dropped to an annual low point, dragging down the output, PVC inventory in East China and South China edged up mainly because of underperformed demand. As PVC downstream industries entered the slack season in June gradually, some downstream enterprises cut operating rates narrowly. They show weak interest in purchasing amid a certain amount of feedstock inventory. In addition, some PVC producers mainly sell directly to the downstream enterprises as the cost of motor carriers is relatively low this year.
On the whole, PVC plant inventory inches down with decreased output, while PVC inventory remains high. In June, the PVC industrial operating rate is expected to move up amid declined unit maintenance. However, there will possibly be supply pressure as PVC social inventory may stay high caused by soft demand.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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