Report Industry Investment Rating - PVC: Neutral [4] - Caustic Soda: Neutral [4] Core Viewpoints - PVC's supply - demand fundamentals are difficult to improve significantly, and its trend will continue to be weak. Caustic soda's upward space may be limited, and its later performance is affected by the price trend of liquid chlorine [3][4] Summary by Related Catalogs Market News and Important Data PVC - Futures price and basis: The closing price of PVC's main contract is 4,892 yuan/ton (-14), the East China basis is -112 yuan/ton (+4), and the South China basis is -62 yuan/ton (-16) [1] - Spot price: The East China calcium carbide - based PVC is quoted at 4,780 yuan/ton (-10), and the South China calcium carbide - based PVC is quoted at 4,830 yuan/ton (-30) [1] - Upstream production profit: The semi - coke price is 575 yuan/ton (+0), the calcium carbide price is 2,875 yuan/ton (-5), the calcium carbide profit is 125 yuan/ton (-5), the gross profit of PVC's calcium carbide method is -552 yuan/ton (-48), the gross profit of PVC's ethylene method is -695 yuan/ton (-2), and the PVC export profit is -9.0 US dollars/ton (-1.6) [1] - PVC inventory and operation: The in - factory inventory of PVC is 38.6 tons (-0.9), the social inventory is 37.3 tons (+1.1), the operation rate of PVC's calcium carbide method is 80.73% (+0.30%), the operation rate of PVC's ethylene method is 65.46% (-1.92%), and the overall operation rate is 76.50% (-0.31%) [1] - Downstream order situation: The pre - sales volume of production enterprises is 65.8 tons (+2.8) [1] Caustic Soda - Futures price and basis: The closing price of SH's main contract is 2,408 yuan/ton (+28), and the basis of Shandong's 32% liquid caustic soda is 61 yuan/ton (+35) [1] - Spot price: Shandong's 32% liquid caustic soda is quoted at 790 yuan/ton (+20), and Shandong's 50% liquid caustic soda is quoted at 1,270 yuan/ton (+20) [2] - Upstream production profit: The single - variety profit of Shandong's caustic soda is 1,478 yuan/ton (+63), the comprehensive profit of Shandong's chlor - alkali (0.8 tons of liquid chlorine) is 374.5 yuan/ton (-137.5), the comprehensive profit of Shandong's chlor - alkali (1 ton of PVC) is 139.53 yuan/ton (+59.50), and the comprehensive profit of Northwest's chlor - alkali (1 ton of PVC) is 1,294.03 yuan/ton (+0.00) [2] - Caustic soda inventory and operation: The inventory of liquid caustic soda factories is 38.42 tons (-0.62), the inventory of flake caustic soda factories is 2.30 tons (-0.28), and the operation rate of caustic soda is 80.50% (-2.00%) [2] - Downstream operation of caustic soda: The operation rate of alumina is 81.56% (+0.89%), the operation rate of printing and dyeing in East China is 60.25% (-0.13%), and the operation rate of viscose staple fiber is 75.17% (-3.40%) [2] Market Analysis PVC - Supply side: In July, upstream devices are under centralized maintenance, but the overall operation rate is expected to decline slightly due to chlor - alkali profit support. New production capacities are expected to be put into operation, so the supply pressure remains [3] - Demand side: It is the off - season for domestic downstream demand, and the operation rate of downstream products is at a low level. The domestic demand is weak, and the export orders are decreasing. Uncertain anti - dumping policies may affect exports [3] - Cost side: The calcium carbide market is expected to be weak, and the cost support for PVC's calcium carbide method is weak. The cancellation of the US export restriction on ethane to China may reduce the cost of PVC's ethylene method later [3] Caustic Soda - The sharp decline in Shandong's liquid chlorine price increases the marginal cost of caustic soda, suppressing the comprehensive profit of chlor - alkali. The weak demand and increasing supply of liquid chlorine may lead to further price drops and potential passive production cuts of caustic soda [3] - A Shandong alumina factory has raised the purchase price of liquid caustic soda, and downstream low - price restocking supports a slight rebound in the near - term spot price, but the overall demand improvement is limited [3] - Supply side: The operation rate of caustic soda is decreasing due to device maintenance, but new production capacities are expected to be put into operation, increasing supply pressure [3] - Demand side: The operation rate of the main downstream alumina is rising steadily, while the non - aluminum downstream demand is still weak [3] Strategy - PVC: After the macro - sentiment eases, PVC's trend returns to the fundamentals. It is expected to continue weak and volatile in the short term. With the inventory expected to accumulate, a short - selling strategy on rallies is recommended, and attention should be paid to macro - export policies and downstream demand recovery [4] - Caustic Soda: There is still room for the comprehensive profit of chlor - alkali to be compressed, the inventory reduction is difficult, and the fundamentals lack positive drivers. The upward space is limited, and attention should be paid to the price trend of liquid chlorine [4]

Report Industry Investment Rating - No information provided on the industry investment rating Core Views - For PVC, the medium - to - long - term supply - demand fundamentals are weak with insufficient upward drivers, but the current valuation is low, and the instability in the Middle East may boost the sentiment of the energy - chemical sector. Attention should be paid to macro - export policies and downstream demand recovery [3][4] - For caustic soda, the overall supply - demand fundamentals are expected to remain weak, with rising and hard - to - digest factory inventories. Attention should be paid to the sustainability of downstream replenishment [3][4] Summary by Related Catalogs Market News and Important Data PVC - Futures price and basis: The closing price of the PVC main contract was 4860 yuan/ton (+1), the East China basis was - 140 yuan/ton (-1), and the South China basis was - 40 yuan/ton (-31) [1] - Spot price: The East China calcium carbide - based PVC was quoted at 4720 yuan/ton (+0), and the South China calcium carbide - based PVC was quoted at 4820 yuan/ton (-30) [1] - Upstream production profit: The semi - coke price was 575 yuan/ton (+0), the calcium carbide price was 2880 yuan/ton (+50), the calcium carbide profit was 130 yuan/ton (+50), the calcium carbide - based PVC production gross profit was - 512 yuan/ton (-86), the ethylene - based PVC production gross profit was - 561 yuan/ton (-41), and the PVC export profit was - 4.0 US dollars/ton (-3.4) [1] - PVC inventory and operation: The in - factory PVC inventory was 39.7 tons (-0.2), the social PVC inventory was 35.5 tons (-0.7), the calcium carbide - based PVC operating rate was 80.45% (+0.55%), the ethylene - based PVC operating rate was 67.36% (-3.77%), and the overall PVC operating rate was 76.83% (-0.64%) [1] - Downstream order situation: The pre - sales volume of production enterprises was 63.8 tons (+1.2) [1] Caustic Soda - Futures price and basis: The closing price of the SH main contract was 2276 yuan/ton (+13), and the basis of 32% liquid caustic soda in Shandong was 380 yuan/ton (-76) [1] - Spot price: The price of 32% liquid caustic soda in Shandong was 850 yuan/ton (-20), and the price of 50% liquid caustic soda in Shandong was 1380 yuan/ton (-20) [2] - Upstream production profit: The single - variety profit of caustic soda in Shandong was 1665 yuan/ton (-63), the comprehensive profit of chlor - alkali in Shandong (0.8 tons of liquid chlorine) was 882.0 yuan/ton (-182.5), the comprehensive profit of chlor - alkali in Shandong (1 ton of PVC) was 310.03 yuan/ton (-132.50), and the comprehensive profit of chlor - alkali in the Northwest (1 ton of PVC) was 1405.55 yuan/ton (+0.00) [2] - Caustic soda inventory and operation: The liquid caustic soda factory inventory was 40.53 tons (+2.32), the flake caustic soda factory inventory was 2.85 tons (+0.06), and the caustic soda operating rate was 80.90% (-2.60%) [2] - Caustic soda downstream operation: The alumina operating rate was 80.87% (+0.52%), the printing and dyeing operating rate in East China was 61.36% (-0.14%), and the viscose staple fiber operating rate was 80.56% (+0.00%) [2] Market Analysis PVC - Supply side: Due to ongoing previous maintenance, the overall PVC operating level declined slightly month - on - month. With reduced future maintenance, production is expected to return. Supported by chlor - alkali profits, it is difficult to drive significant PVC production cuts. Coupled with the expected new production capacity coming on stream from June to July, the supply pressure of PVC remains high [3] - Demand side: The operating rate of downstream products declined slightly, and the purchasing enthusiasm was low, with the weak domestic demand pattern continuing. The PVC social inventory continued to decline month - on - month, but the destocking rate was slow. With increased supply and weak demand in the future, the social inventory may enter a restocking phase. Attention should be paid to the inflection point of PVC inventory. Export orders are being stably delivered, but there is no progress on the Indian BIS certification extension policy and anti - dumping policy. Attention should be paid to the sustainability of the export side [3] - Medium - to - long - term: The supply - demand fundamentals of PVC are weak, with insufficient upward drivers. However, the current valuation is low, and the instability in the Middle East may boost the sentiment of the energy - chemical sector. Attention should be paid to macro - export policies and downstream demand recovery [3] Caustic Soda - Supply side: There are still many upstream device maintenance, mostly concentrated in the North China and East China main regions. The operating rate in Shandong declined month - on - month. However, driven by good chlor - alkali profits, most upstream devices maintain high - load production. The overall caustic soda operating rate remains high, and there is an expected new production capacity coming on stream from June to July, further increasing the supply pressure [3] - Demand side: The operating rate of the main downstream alumina increased slightly, but the capacity return was not obvious after profit recovery, and the new production capacity in the second quarter was not fully released. The delivery volume of a Shandong alumina plant has returned to a high level, and the liquid caustic soda purchase price has started to be continuously reduced. Since June 17, it has been further reduced by 20 yuan to an ex - factory price of 800 yuan/ton, and the caustic soda spot price has also followed the decline. Non - aluminum demand remains weak, the printing and dyeing operating rate declined month - on - month, and the operating rate of terminals such as viscose staple fiber is at a low level. Downstream is cautious about high prices, and purchases are mainly for rigid demand, with continuous negative feedback on the demand side [3] - Cost side: The price of raw salt has fallen to a low level, and the power cost has decreased after the coal price reduction, so the cost support for caustic soda has shifted down [3] - Overall: The current comprehensive chlor - alkali profit is good, but the increasing factory inventory of caustic soda is difficult to digest. The overall supply - demand fundamentals of caustic soda are expected to remain weak. Attention should be paid to the sustainability of downstream replenishment [3] Strategy - PVC: Neutral. In the medium - to - long - term, the supply - demand fundamentals of PVC are weak, with insufficient upward drivers. However, the current valuation is low, and the instability in the Middle East may boost the sentiment of the energy - chemical sector. Wait for a rebound to short on rallies. Continue to pay attention to macro - export policies and downstream demand recovery [4] - Caustic Soda: Cautiously short for hedging. The current comprehensive chlor - alkali profit is good, but the increasing factory inventory of caustic soda is difficult to digest. The overall supply - demand fundamentals of caustic soda are expected to remain weak. Attention should be paid to the sustainability of downstream replenishment [4]