Domestic EVA Production Continues to Decline Last Week, Price Increase Expected This Week? [SMM Analysis]

Last week, domestic PV-grade EVA production was only 24,000 mt, mainly constrained by equipment maintenance and malfunctions, with a slight decrease in inventory. Currently, companies undergoing maintenance have resumed production, stabilizing PV-grade EVA output. It is expected that the tight supply will improve this week. Meanwhile, imported materials are arriving gradually, with volumes reaching 8,000 mt, and December import volume is expected to increase by 74% compared to the previous month. Imported materials have a relative price advantage. Although the market remains optimistic about a price increase this week, the extent of the rise may narrow.

At present, the inventory of PV-grade EVA materials is relatively low, primarily due to some petrochemical companies shifting their production center to LDPE during Q2 to Q3, as well as large-scale maintenance by certain companies. This led to a continuous decline in PV-grade EVA inventory, which remained low in August, with prices rebounding from 9,391 yuan/mt.

Since Q3, the domestic price of PV-grade EVA materials has been inverted compared to foaming-grade EVA and cable-grade EVA, resulting in a sharp decline in imports of PV-grade EVA, further tightening supply. The EVA market is currently in a state of undersupply, with domestic supply slightly insufficient and still relying on imports to supplement. Under the condition of undersupply, EVA prices exhibit low elasticity and are more sensitive to supply and demand changes. Therefore, when inventory is at a low level, prices can rise rapidly.

Although December is typically a period of weak prices, PV-grade EVA prices have continued to rise under the influence of multiple factors. Due to the multiple stages in the upstream petrochemical industry, inventory decentralization is significant, usually requiring 2 to 3 months to reach inventory limits and force price reductions. Therefore, current prices still have upward potential. It is expected that overall domestic supply in January will remain stable, but due to further reductions in module production plans, EVA resin inventory may reach a slightly higher-than-normal level by month-end, and prices may stabilize. However, considering the Q1 production cuts in modules, holidays for film factories may be extended next year. Traders and petrochemical plants may implement slight price reductions to alleviate pre-holiday inventory pressure. Special attention should be paid to the dynamics of LDPE facilities in January; if production shifts back to PV-grade EVA, the likelihood of a price decline in January will increase.