The production and sales of the ethylene process are booming by virtue of its price advantage, while the price focus of the PVC market is fluctuating within a range due to cost competition and the low season of demand in the first quarter.
Recently, the market price of PVC has been consolidating. The operating range is 6130-6350 yuan/ton, and the predicted value is 6100-6350 yuan/ton. The low price is slightly higher than the predicted value by 20 yuan/ton. The sharp increase in export volume during the week led to another improvement in market sentiment.
From a fundamental point of view, supply continues to increase, and maintenance companies have gradually picked up their load. The market believes that domestic supply will remain high in the next three weeks. The scale of enterprise equipment maintenance has been tightened, and enterprises have maintained stable production before and after the Spring Festival, and the overall supply is expected to change little.
In terms of demand, the downstream rigid demand has gradually decreased, and the demand for stocking before steering knuckles has reduced the enthusiasm for market procurement. From the perspective of macro policies, at the end of the year and the beginning of the year, there are intensive policies to promote the overall economy in 2023, and there is a preference for market expectations after the Spring Festival. Due to the strong demand in the Indian market and the market’s concerns about the delay in the transportation of ocean-going goods from the United States, the goods arriving in Hong Kong from January to February are snapped up at low prices. As the quotation time of major Asian companies approaches in February, the market is mainly on the sidelines; During the period, rigid demand has shifted to stocking demand.
In terms of cost, the cost support of marginal enterprises is relatively strong, and the supply of ethylene method is high. The marginal enterprise cost support of the calcium carbide method is stable and firm, and the start-up load of some enterprises in the eastern part is difficult to maintain a high level. The ethylene method is supported by low cost and the supply is good, and the enterprise price and sales can be adjusted flexibly.
After the New Year's Day holiday, domestic PVC production enterprises maintained a high level of start-up, the scale of maintenance was narrowed, new devices were expected to be put into production, and the market supply continued to increase; domestic trade was affected by the Spring Festival, and the logistics of automobile transportation slowed down. It is weak, and the sustainability of foreign trade exports is not strong. The market waits and sees the regional prices in February announced in the first half of the year. Industrial costs remain stable, and there is still support at the bottom. On the whole, the fundamentals of the PVC market are under pressure in the off-season, the market turnover has turned weak, the industry has accumulated inventory, and the price center of gravity is expected to fluctuate and lower. However, considering the macro instability such as the economy, the room for decline is expected to be limited.
From a mid- to long-term perspective, contradictions in the domestic PVC industry still exist, and the supply capacity base is strong. However, in view of the fact that the impact of high costs is difficult to fully release, under the competition for new production capacity, high-cost enterprises in the industry are expected to withdraw or adjust their industrial production plans one after another; Advantages, both production and sales are booming, and the price focus of the PVC market is under the influence of cost competition and the off-season demand in the first quarter, maintaining range fluctuations.
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