In mid-August, the domestic PVC industry entered a window period for concentrated maintenance. Multiple mainstream production enterprises in Northwest and East China simultaneously shut down large-scale units for maintenance, covering the two mainstream production processes of calcium carbide method and ethylene method. This phased compression of effective industry supply has had a significant impact on short-term PVC spot prices and market trends. Currently, maintenance work on several key units is proceeding in an orderly manner, and production is expected to resume successively in late August.

In the core region of Northwest production capacity, Inner Mongolia Junzheng's Wuda plant 340,000 tons/year calcium carbide PVC unit officially entered a planned maintenance cycle on August 10, with this maintenance lasting until August 21. As a core PVC capacity unit in the Northwest, the shutdown of this unit will directly reduce regional calcium carbide PVC output. Since the Northwest is a major domestic PVC production area, changes in its capacity play an important guiding role in national cargo supply and regional price differentials. Relying on the advantages of coal and calcium carbide raw materials, calcium carbide PVC occupies the mainstream share of the domestic PVC market, and the concentrated maintenance of units has further intensified expectations of short-term supply contraction.

During the same period, another core domestic calcium carbide PVC unit——Xinjiang Zhongtai's 300,000 tons/year PVC production unit started shutdown maintenance on August 8, with the maintenance cycle expected to last until August 20. The maintenance period of this unit highly overlaps with that of the Inner Mongolia Junzheng unit. The superposition of the dual capacity shutdowns has significantly increased the loss of domestic calcium carbide PVC capacity in mid-August. Industry monitoring data shows that the operating rate of the domestic PVC industry in early August saw a slight month-on-month decline. Concentrated maintenance was a core influencing factor, and the circulation volume of market cargo continued to tighten in the short term.

In terms of the East China market, the annual major overhaul of Formosa Plastics Ningbo's 400,000 tons/year ethylene PVC unit is continuing to advance. As a benchmark ethylene PVC capacity in East China, this annual major overhaul aims to complete comprehensive equipment maintenance, process optimization, and safety hazard screening to ensure the long-term stable operation of the unit. Ethylene PVC products have excellent quality and are widely used in high-end pipes, profiles, medical consumables, and other fields. The maintenance of this unit will lead to a phased reduction in the supply of high-end PVC cargo in East China, improving the regional market supply-demand structure.

From the perspective of the overall industry fundamentals, August coincides with the traditional switching node between the off-season and peak season for the PVC industry. The operating rates of downstream building materials and plastic products industries are steadily recovering, and rigid demand procurement is gradually warming up. However, the concentrated shutdown of multiple large and medium-sized units this month has formed a market pattern of "marginal demand recovery and phased supply contraction." Currently, the overall inventory pressure in the market is gradually alleviating. Coupled with the expectation of supply contraction brought about by maintenance, the fundamentals of the PVC market continue to improve.

Industry analysts stated that this concentrated maintenance cycle is concentrated in mid-to-late August. With the successive resumption of production of multiple units at the end of August, the overall operating rate of the PVC industry will gradually rebound, and market supply will steadily recover. In the short term, concentrated maintenance supports the resilience of PVC prices. Subsequent market trends will focus on the progress of unit resumption, price fluctuations of upstream raw materials such as calcium carbide and crude oil, and the strength of downstream terminal demand release.

From:ChemNet