The PVC market is volatile in the short term

The polyvinyl chloride (PVC) market showed a weak volatility in November as demand weakened
.
As of November 21, the mainstream price of Type 5 ordinary calcium carbide in East China market was 5850~6000 yuan (ton price, the same below), down 630~780 yuan
from October 9.
"Affected by negative factors such as high inventories, slowing demand, and lower PVC prices in Asia, it is expected that the PVC market will fluctuate downward in the short term
.
" Longzhong information analyst Shi Lei and other industry insiders believe.

Supply continues to be accommodative

According to Longzhong information monitoring data, domestic PVC production in October was 1.
811 million tons, an increase of 1.
52% month-on-month and 6%
year-on-year.
At the same time, China's PVC social inventory is also high, as of November 20, PVC social inventory reached 289,200 tons, an increase of 102.
10%
year-on-year.
Among them, the social stock in East China was 232,200 tons, an increase of 107.
14%
year-on-year.

"Since this year's Spring Festival is earlier than previous years, if the inventory cannot be significantly removed in November ~ December, then the already high inventory superimposed on the seasonal large accumulation situation, then the PVC industry may have a serious oversupply phenomenon
.
" Therefore, high inventory is the core contradiction
of the current PVC market.
Yang Qi, an energy and chemical analyst at the Orient Derivatives Research Institute, said
.

YANG Qiao analysis, It is expected that the quarter-on-quarter PVC supply growth rate will be around
3%.
This is because under the pressure of high inventory, some new PVC production capacity was still released in November ~ December, mainly including 400,000 tons/year ethylene plant of Guangxi Huayi Chlor-Alkali Chemical Co.
, Ltd.
, 400,000 tons/year of Shandong Xinfa Group Co.
, Ltd.
and 300,000 tons/year calcium carbide plant of Shaanxi Jintai Chlor-alkali Chemical Co.
, Ltd
.
At the same time, the recent increase in import offers, PVC market supply continues to be loose
.

Demand enters the off-season

The downstream profile and pipe industry of PVC is mainly used in the construction field, so the real estate market supports the demand for PVC
.
In January ~ October this year, China's real estate market continued to weaken, which was transmitted to the PVC market, and PVC demand also showed negative growth
.

Although the domestic real estate market is expected to be further relaxed under policies such as "guaranteed handover of buildings", there is still a certain degree of uncertainty
.
Especially affected by the epidemic, the start speed of real estate enterprises has slowed down, and the demand for PVC products enterprises is shrinking, resulting in weakened
demand for PVC raw materials.

Industry insiders believe that the market is still cautious about demand expectations in the fourth quarter
.
"Since November, domestic PVC products enterprises have entered the off-season, and it is expected that the operating rate of pipe and other industries in November will decrease by 1% compared with October, and the operating rate in December will fall by another 3%
compared with November.
" Shi Lei said
.

Export pressure increases

Affected by the increase in global supply and the weakening of inflationary demand in Europe and the United States, the foreign demand for PVC has slowed down, and the export of raw materials and products is expected to decline
year-on-year.
According to customs statistics, China's PVC exports in October were 96,600 tons, down 9.
47% month-on-month and 13.
52%
year-on-year.

"As the world's largest PVC exporter, the United States, with the suppression of overseas demand, and the US real estate market has also significantly 'cooled', resulting in the continuous recovery of US PVC exports and the collapse of FOB PVC
.
According to the feedback of international traders, the US source of goods has begun to re-enter the Asian market, which will significantly increase the export pressure
of China's PVC in the fourth quarter.
It is expected that the monthly export of domestic PVC in the fourth quarter will fall back to around
100,000 tons.
Yang Feng analyzed
.

Based on the sales pressure brought by PVC exports in the United States, Southeast Asia, India and other places began to lower export quotations, and the export quotations in the fourth quarter fell by 16%~18% month-on-month, which also led to China's PVC export prices falling and the export market was under pressure and bearish
.

"According to Longzhong information statistics, the number of foreign trade orders signed by PVC enterprises continues to decrease, and the current weekly trading volume is only a few thousand tons; The foreign trade export prices of domestic calcium carbide PVC enterprises have no advantage over the prices of the United States, Japan, South Korea and Taiwan; Ethylene processing enterprises mainly focus on long-term orders, but there is also a phenomenon
of concessions.
At present, including Southeast Asia, South Asia and other domestic PVC export places demand is weak, coupled with the United States to port cargo before the end of December or a significant increase, it is expected that at the end of this year, the Asian PVC market will mostly show a bearish trend, so domestic PVC enterprises export pressure
.
Shi Lei said
.

In addition, China's Taiwan region is one of the largest PVC exporters in Asia, due to its recently announced December cargo quotation reduction of 55~90 US dollars, which has put pressure
on the upward adjustment of PVC export prices in mainland China.