China PVC Powder Supply Summary in Aug and Forecast in Sep
Preface: PVC powder output loss due to maintenance in August saw an M-O-M increase, though some producers raised operating rates. In August, calcium carbide prices moved up backed by tight supply, while PVC powder prices moved up. However, the increment in the cost overpassed that in the PVC price, so the profit loss intensified notably. On the whole, PVC powder supply remained largely stable in August, and calcium carbide prices gave stronger cost support to the PVC market. SCI reckons that the PVC supply will climb due to fewer maintenance units in September.
PVC powder output loss due to maintenance in August saw an increase.
In previous years, PVC powder unit maintenance was relatively concentrated in August. In August 2023, the output loss due to maintenance saw a Y-O-Y increment. There was a large amount of PVC powder units undergoing maintenance. However, some producers raised operating rates, propping up the PVC powder output in August.
According to SCI, in August, the output loss due to maintenance was 360.9kt, up 41.7kt M-O-M. The PVC industrial operating rate was 74.11%, up 1.01 percentage points M-O-M. The PVC powder output was 1,928.55kt, up 26.30kt M-O-M.
PVC inventory available for sale first dropped and then rose, while PVC plant inventory saw a downward trend.
In August, export orders at PVC powder producers were fewer than those in July, while China’s domestic orders at some producers increased. The overall orders changed narrowly from July. PVC inventory available for sale in end-August remained largely stable compared with end-July. Operating rates at downstream enterprises failed to rise, but PVC plant inventory dropped with the delivery of some export orders. According to SCI, at the end of August, PVC inventory available for sale was -249.6kt, down 8.1kt M-O-M, and PVC plant inventory was 304.2kt, down 64.4 M-O-M.
PVC powder social inventory inched down in August.
In August, the PVC powder industrial operating rate inched up, while though China’s downstream consumption was in the doldrums, export orders were delivered. Thus, the PVC social inventory inched down. However, the absolute volume of social inventory was still higher compared with the same period in previous years. At the end of August, PVC powder overall sample inventory in South and East China was 411.6kt, down 13.6 M-O-M.
SCI reckons that the PVC powder supply will inch up in September.
Limited PVC powder unit maintenance plans have been heard at present, and some overhauled units are planned to restart. Thus, in September, the output due to maintenance will possibly drop to 230-260kt, and the PVC industrial operating rate may rise to 76% or so.
In September, operating rates in the real estate industry usually enter the peak season. SCI reckons that downstream enterprises will raise operating rates slightly. However, orders at pipe producers underperform at present. In addition, export orders can hardly improve significantly. The change in offers given by Formosa Plastics should be concerned. From the perspective of costs, calcium carbide prices may first be stable and then inched down. Calcium carbide prices may still support the PVC powder market from the bottom.
On the while, the increment in the PVC supply and demand is projected to be limited. SCI reckons that PVC plant inventory will pile up, and the social inventory will see an inflection point in September.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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