Lead: With ample spot supply of vinyl acetate and persistently weak domestic demand, suppliers face significant sales pressure, driving prices further downward. As a result, the price of vinyl acetate continues to decline sharply.

Entering May, domestic vinyl acetate plant operating rates remained at relatively high levels, with some calcium carbide-based units running at full capacity. Meanwhile, logistics constraints during the holiday period led to inventory build-up at enterprises, increasing the pressure on post-holiday shipments. Upstream cost support weakened, while downstream demand remained subdued. Multiple EVA units underwent maintenance, and despite high cost levels, demand remained too sluggish to revive. Some producers with high production costs saw profitability approach breakeven levels, prompting petrochemical companies to halt or cut output to maintain a firm pricing mechanism. Industry operating rates fell to relatively low levels. Insufficient follow-up on traditional end-user orders, coupled with high cost pressure, led to reduced plant operating rates, weak purchasing intent among users, and minimal new transaction activity. Supplier sales pressure intensified, and price centers continued their sharp downward trend. As of today, taking the East China petrochemical price as an example, high-end and low-end negotiations ranged from 7,900 to 8,200 yuan/ton, representing a decline of 15.26% from the first working day of the month.

From a cost perspective, planned maintenance shutdowns of some upstream glacial acetic acid units provided some support to market sentiment, stabilizing prices and limiting volatility. The ethylene market narrowed slightly, with increased naphtha feedstock supply in Japan and South Korea boosting the overall operating rates of naphtha crackers in the region. As cracker utilization rose, exportable ethylene resources from Japan and Korea slightly increased, contracts partially resumed, and the previously acute shortage of imported ethylene cargoes eased. At the same time, domestic PVC units entered a period of concentrated rate reductions in May, reducing the demand for imported ethylene cargoes. Under the combined weakening of both supply and demand, negotiations in the ethylene market gradually shifted downwards, with prices exhibiting a weak trend. In the calcium carbide sector, post-holiday logistics recovery improved producer shipments, and downstream vehicle queues were significantly reduced, leading to active procurement. Short-term supply decreases are expected to drive a continued upward trend, but the progressive implementation of downstream maintenance is increasing market caution, and price hikes are proceeding with prudence. Overall, cost-side support remains limited.

Currently, vinyl acetate products from different processes maintain a certain level of profitability. As of today, products from the calcium carbide process have a theoretical profit of 2,220 yuan/ton, while those from the ethylene process have a theoretical profit of 1,101 yuan/ton. This also leaves some room for further declines in vinyl acetate prices.

Outlook: On the downstream demand side, some EVA units are gradually restarting, with operating rates improving. They are primarily executing contract orders, and large-ticket demand has increased somewhat. However, due to the impact of tax rebate policies in the photovoltaic industry and the lack of incremental demand from rigid sectors such as foaming and shoe materials, the EVA industry still appears sluggish and weak, with operating rates likely to remain at medium-to-high levels. VAE emulsion overall operating rates are relatively stable. Polyvinyl alcohol is mostly produced in co-production units, which has limited impact on vinyl acetate. Traditional end-use sectors, such as construction and coatings, are recovering slowly. Plant operating enthusiasm is low, and restocking willingness is insufficient, with users generally adopting a just-in-time purchasing approach. Spot market transactions are unlikely to see significant volume increases. Overall, downstream demand is unlikely to provide strong support, weighing on market sentiment. Guangxi Huayi's new 300,000-ton/year capacity is scheduled to be commissioned in June, releasing further bearish factors of increased supply and insufficient demand support. The market is expected to remain under pressure, with bearish sentiment prevalent among participants, and price centers are likely to decline further.