PVC Industrial Operating Rate to Increase in Jun
Introduction: The PVC industrial operating rate inched down in May due to intensive maintenance. In June, fewer PVC producers planned to take overhauls, so the industrial operating rate will possibly move up. China’s domestic demand can hardly improve notably, while export orders may weaken due to unresolved Indian BIS certification and anti-dumping policies, coupled with the monsoon season in Southeast Asia and India. Coupled with the commissioning of newly added PVC units, the supply pressure may be notable.
China’s PVC industrial operating rate inched down in May due to intensive maintenance.
May saw continued concentrated PVC unit maintenance. The output loss due to maintenance in May was 277.68kt, down 3.57kt MoM. However, some PVC producers implemented unexpected production cuts, contributing to an overall MoM decline in the industry operating rate.
The average operating rate in May stood at 75.09%, down 0.39 percentage points from April. As May has one more calendar day, the PVC output was 1,995.05kt in May, up 68.67kt.
China’s PVC industrial operating rate shrank constantly.
With decent export deliveries in May and sustained lower operating rates, both warehouse inventory and plant inventory continued to decline, though at a moderating pace. As of May 29, the plant inventory at sample producers was 399kt, down 17.12kt. The social inventory in South and East China (original sample) was 336.2kt, down 47.7kt from April 30, while the expanded sample showed 547.8kt, down 70.4kt from April 30.
China’s PVC industrial operating rate will possibly move up in June.
While June typically sees concentrated unit maintenance, currently known planned shutdowns for June appear limited. PVC output loss due to maintenance is expected to drop to around 240kt in June, with the operating rate expected to be around 76.5%.
China’s domestic demand may remain soft in June. Indian buyers show cautious sentiments toward purchasing amid uncertainties regarding India’s BIS certification requirements and anti-dumping policies. Additionally, the approaching monsoon season in India and Southeast Asia during June is expected to weaken seasonal demand. Newly added export orders may weaken. However, with decent order backlogs, export deliveries may remain at relatively high levels.
June may see increased supply alongside potentially weakening demand, suggesting growing supply-demand imbalances. Furthermore, market participants are closely monitoring new capacity startups scheduled for Q3, which could significantly influence long-term market expectations.
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