PVC is in a dilemma

At present, although the shortage of calcium carbide has eased and the cost-side support for PVC has weakened, rising exports and low inventories have provided support for PVC prices.
In this context, PVC will show a trend of high oscillations.

At present, as the problem of tight supply of calcium carbide is alleviated, the supporting role of cost for PVC has begun to weaken, and it is difficult for some downstreams to conduct high-priced PVC downwards, showing that there are hidden dangers in the rise of PVC.

However, the current low PVC inventory, rising exports, and the recovery of terminal real estate and infrastructure have provided new support to PVC prices, which makes PVC prices easy to rise but difficult to fall.

Cost support weakened

In March, the government strengthened the “dual control” of energy consumption in the northwest region, which restricted the production of large energy-consuming enterprises such as calcium carbide production, and the phenomenon of furnace shutdown or load reduction, resulting in a decline in the supply of calcium carbide, and the price of calcium carbide.

Rising, some areas even hit a historical high of 5,000 yuan/ton.
According to statistics, as of March 28, the spot price of calcium carbide in Northwest China was 4600 yuan/ton, an increase of 1680 yuan/ton from the low point at the end of January, an increase of 57.

In April, the government's "dual control" of energy consumption will weaken, and calcium carbide production will gradually return to normal.

At the same time, due to the insufficient supply of raw materials for downstream PVC production enterprises and the poor production and operation conditions caused by rising costs, the operating load of PVC production enterprises has decreased, which further alleviated the problem of insufficient supply of calcium carbide.

Tight supply is expected to ease

Affected by the sharp increase in the price of calcium carbide, the profits of calcium carbide PVC production enterprises continued to decline, coupled with the insufficient supply of raw materials for some companies, leading to large-scale overhauls of northern calcium carbide PVC production enterprises in mid-to-late March, resulting in a decline in PVC supply.

According to statistics, as of March 30, the cost of calcium carbide production enterprises outside East China was close to 8,000 yuan/ton, and the production profit was 734 yuan/ton, a year-on-year decrease of 2536 yuan/ton.
However, for the integrated plant in the Northwest region, although the profit of soda ash is currently low, the price of liquid chlorine is higher.

　　End-demand performance is good

　　Affected by the epidemic, the production and trade of PVC in foreign countries have been affected, and the degree of dependence on my country's PVC demand has increased.

According to data released by the General Administration of Customs, PVC imports in February were 19,600 tons, a year-on-year decrease of 32.
78%; PVC exports were 144,600 tons, a year-on-year increase of 386.

　　In terms of downstream demand, the overall trend is stable and positive.

Affected by the high level of completion of new houses and infrastructure construction, orders for PVC pipes performed well, market demand was stable, and the starting load of pipes was higher than the same period in previous years.

　　In March, domestic PVC production load decreased, exports increased, and demand improved, resulting in low PVC inventory.

As of March 26, domestic PVC social inventory has decreased by 40.

　　Based on the above analysis, as the tight supply of calcium carbide eases, the supporting role of cost for PVC has begun to weaken, but rising exports and low inventories have provided support for PVC prices, and PVC has thus fallen into a dilemma.

Under this circumstance, the author believes that the probability of high-level oscillation of PVC prices in the later period is relatively large, and the oscillation interval may be 8300-9300 yuan/ton.

　　Transfer from: Chemical Network

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