In May 2019, the price of PVC futures rose to 7160, followed by adjustments. With the end of the small off-season in June, demand began to pick up in early July, inventory fell to a moderate level, and PVC prices were again facing support.
According to the statistics of institutions, the output of PVC decreased by 0.2% from January to May 2019, which is deviated from the expected cumulative annual increase of 7% at the end of 2018. From the historical perspective, the output in January-May 2017 increased by 12.4% year-on-year, the output in January-May 2018 increased by 6.5% year-on-year, the output growth in 2019 was declining year-on-year, and the elasticity of the supply side continued to decrease. In 2019, the growth of PVC supply side was much lower than expected, mainly due to two factors. The first is that in November 2018 and April 2019, two sets of devices that were accidentally accidental have not been restarted, and the reduction at the supply side is greater than the increase in capacity of some devices. The second is due to the impact of safety production, environmental protection inspection and the improvement of safety awareness of enterprises. In May 2019, the amount of maintenance losses exceeded the same period last year. The productivity utilization rate of the plant has been increased to over 80%, and the space for continuous output expansion is small. On the whole, the supply side is lower than the market expectation, which has a positive supporting effect on the price.
From January to May 2019, the apparent consumption of PVC increased by 0.9% year-on-year, mainly due to the net import pattern from January to May. Some imports filled the gap of demand. From the data of supply and demand, output is subtracted and demand is added. Overall, the tight supply and demand pattern exceeds market expectations.
From the PVC inventory data, the PVC inventory began to decline from March 22, 2009. The latest data is more than 30% higher than the same period last year. From the details of inventory, the same-rate increase of inventory is mainly concentrated in several key warehouses in East China, some of which are temporarily non-transferable. The total inventory excludes this part of the inventory, which is not much different from the same period last year, and the inventory has dropped to the medium level since 2016. Traders and terminals do not have a high number of days available for inventory, and have a limited repressive effect on prices.
From the seasonal perspective, the terminal start-up rate declined slightly in June and began to rise slowly at the end of June and the beginning of July, indicating that the demand side began to prepare for the start-up of the peak season of Golden Nine Silver Ten.
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Overall, the tight supply and demand pattern of PVC has not changed, which is conducive to the continuous decline of social inventory, and will further weaken the role of price suppression. Seen from the seasonal demand situation, the gradual rise of demand side will support the price to a certain extent.