Macro uncertainty still exists PVC prices are under pressure

On the supply side, the cumulative output of PVC from January to May fell by 5.
1% year-on-year, of which the maintenance in February and April was relatively concentrated, and the output loss was relatively large
.
In June, the PVC operating rate improved compared with the previous period, and the monthly production increased
slightly.
From the perspective of import volume, the cumulative import of PVC from January to May fell by 1.
4% year-on-year, of which the import volume in May increased by 130% month-on-month, and the import volume in May was relatively concentrated in Hong Kong, mainly due to the overvaluation of domestic prices in April compared with the price of the peripheral market, there is arbitrage space in imports, import orders are more concentrated, and some orders are concentrated in May
.
Some of the previous import orders arrived in June and July
.
Overall, the pressure on the supply side in the first half of the year was relatively limited
.

On the demand side, due to the disruption of the epidemic after the Spring Festival in 2020, the resumption of work was later than the same period of previous years, the terminal operating rate slowly recovered, the current terminal operating rate was at a slightly higher level in the annual middle, due to seasonal factors, the operating rate in North China decreased slightly compared with May, and the terminal operating rate in South China and East China was at a relatively high annual level
.

In terms of inventory, the PVC inventory index on June 24, 2020 was 2.
9% higher than the same period last year (excluding new samples in 2020), PVC continued to destock for 13 consecutive weeks after the inventory inflection point on April 3, 2020, and there were differences in the rhythm of destocking due to terminal starts or order factors, but the overall process was in the process of destocking
.

After April, all links gradually destocked, and by the end of June, PVC social inventory was basically the same as the same period of previous years, and the suppression of prices was weakened
.
From the perspective of the production progress of PVC new installations in 2020, the release of new production capacity from January to June is small, and some devices are put into operation from August to September, and there is uncertainty in the release of output, and the new production before the end of September is relatively limited, and it is difficult for the supply side to change
significantly.

In the short term, inventories continue to decline, and supply-side suppression of prices continues to weaken.

The main pressure of PVC mainly comes from macro uncertainty, and the future market pays attention to the recovery of the global economy under the background of the epidemic
.