PVC short-term price is mainly weak

On the supply side, PVC production this week fell
significantly month-on-month.
As of May 26, the overall operating rate of PVC was 74.
38%, down 4.
57% month-on-month and increasing 0.
12%
year-on-year.
Among them, the operating rate of calcium carbide method decreased by 5.
35% to 73.
93%, and the operating rate of ethylene method increased by 1.
21% to 79.
61%.

On the demand side, PVC downstream operating rates have not changed much this week, and demand is still weak
.
The start of profile enterprises counted by Longzhong is currently about 4-6%.

On the whole, the current downstream procurement enthusiasm is still low, most enterprises maintain the established turnover inventory, and some enterprises take advantage of the low
.
Most of the orders of downstream enterprises are not good, especially the orders of small and medium-sized enterprises have shrunk significantly, and the expectation for the future market is weak
.

In terms of costs, calcium carbide and ethylene prices fell
slightly this week.
As of May 26, the price of calcium carbide in Northwest China was 4425 yuan / ton, down 1.
88% from May 20; The price of calcium carbide in East China was 4950 yuan / ton, down 1.
49% from May 20; The price of calcium carbide in South China was 5,025 yuan / ton, down 1.
47%
from May 20.
As of May 26, CFR Northeast Asia ethylene prices were $1,071/ton, down 2.
72%
from May 20.
This week, the cost of calcium carbide method rose slightly, and the cost of ethylene method decreased, among which the calcium carbide method showed obvious losses, and PVC cost support was strengthened
.

In terms of inventory, social stocks rose month-on-month this week, and the latest PVC social stocks compiled by Longzhong were 311,700 tons, an increase of 3.
32% month-on-month and 69.
40%
year-on-year.

On the whole, the short-term PVC fundamentals are neutral and bearish
.
From the valuation point of view, the current calcium carbide method has a loss, and the cost support of PVC has increased
.
From the perspective of supply and demand structure, short-term operating rate and output decreased month-on-month, downstream demand was weak, and inventory increased
month-on-month.
At present, PVC demand is weak, which has a positive impact on prices, and it is expected that short-term prices will be
weak.
In the medium term, focus on the strength of the policy of stabilizing growth, and demand is expected to be better in the second half of the year than in the first half
.
Focusing on pressure around 8800 and support around 8000 in the short term, investors are advised to wait and see for the time being, waiting for demand to pick up and prices to stabilize.