PVC: Supply and Demand Imbalance Weak Operation

Chemical Market Outlook in the Second Half of 2019

In the first half of the year, the PVC market showed a downward trend and then a ri.

Supply is expected to increase

Wang Chunming, general manager of Shandong Ruiyang Chemical Trading .

According to him, the production capacity release progress of the PVC industry is affected by environmental factors, and the approval procedures are becoming more and more stri.

Liu Tianyang, an analyst at Jinlianchuang, said that at present, there are not many PVC plants put into operation in the first half of the year, and the planned new production capacity in the second half of the year is about 1 million tons, including Xinjiang Zhongtai, Ningxia Jinyuyuan, Taizhou Liancheng, Ningbo Hanwha, Qilu The petrochemical industry, coupled with the plan to restart some companies that have stopped production this year, is expected to add about 3 million tons of new production capacity in the second half of the ye.

Industry insiders believe that based on the current performance of the PVC market, it is expected that the short-term will still be dominated by destocking, and the market lacks a sharp upward moment.

Profit margins narrow

At present, there are two main PVC production processes in China, namely the ethylene raw material route and the acetylene raw material route (calcium carbide PVC), of which the calcium carbide PVC is a Chinese characterist.

Wang Chunming said that in the first half of the year, the performance of the PVC market was acceptable, which was closely related to the sharp rise in the price of calcium carbide, one of the raw materia.

As a "two high and one capital" industry, calcium carbide faces many policy restrictio.

Liu Tianyang said that the upstream supply of limestone as calcium carbide is also limited due to environmental protection reaso.

Overall, in the second half of the year, supported by the tight supply of goods, the calcium carbide market will maintain a strong shock pattern, and the correlation with the downstream market will decrease, which will further reduce the profit space of the PVC indust.

Difficult to increase demand

Wang Chunming believes that with the continuous deepening of national policies, the growth rate of the sales area of ​​commercial housing across the country will continue to decline, and the sluggish demand in the PVC industry will be difficult to allevia.

The PVC market is highly correlated with real esta.

        At the same time, affected by the environmental storm, the output of plastic products experienced negative growth in 2018, and the output remained low in the first half of this ye.

        In addition, the Sino-US trade war has greatly reduced the export of PVC flooring, which has also become a negative impact on the PVC market in the second half of the ye.

        According to Wang Chunming, flooring accounts for about 9% of the downstream demand for PVC, which is mainly export.

        Comprehensive supply and demand, profit and demand and other aspects, the industry believes that the demand released by the "Golden Nine Silver Ten" in the second half of the year will strengthen the role of the PVC mark.