Cost side: due to sufficient domestic supply, lower downstream profits and weak demand, Asian ethylene market closed down another $10 / T on the 8th. With the decrease of the difference between ethylene and naphtha oil price, the profits of cracking unit will also be under pressure. At present, the difference between ethylene and naphtha oil price is about 330 USD / T. Some styrene units stopped, which made the demand of ethylene spot decreased, and the overall atmosphere of downstream market was weak. In early June, the price of raw materials calcium carbide fell slightly. The raw material, orchid carbon prices, fell sharply, and the cost support of calcium carbide was weakened.

Supply and demand: since June, PVC maintenance enterprises have decreased, the commencement rate has increased, and the market supply will increase. According to statistics, only Ordos and Dezhou Shihua have maintenance plans in June, and in the later period, they should continue to pay attention to whether there are new enterprises to repair. In terms of demand, affected by the current high PVC price, the cost increase profit of downstream products enterprises is weak, some enterprises lose money, and the downstream plant starts to decline. According to statistics, the current downstream enterprise start rate is about 60%, and the number of new orders is relatively small. Under the demand, the end enterprises may enter the relative off-season of procurement.

Macro: in the recent two state council meetings, the rise of commodity market was continuously named, and the PVC futures market continued to cool down and prices fell rapidly. In terms of export, the export market continued to be in a light pattern in June, affected by the recovery of foreign devices and the epidemic.

In conclusion, the probability of maintaining weak trend in PVC market is relatively high, but considering the influence of cost, supply and demand and macro factors, the price is unlikely to fall sharply. It is expected that the PVC market will remain weak in the late period.