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From a mid- to long-term perspective, market demand is slowly recovering, and economic and environmental expectations remain to be seen. In view of the time required for the peak season, the market center of gravity is expected to be low due to oversupply, and PVC prices have a downward trend under supply pressure in February.
After the Spring Festival, the center of gravity of Chinese PVC prices remains firm, with an operating range of 6550-6650 yuan/ton, and the predicted value is 6400-6550 yuan/ton, an increase of 150 yuan/ton from the expected value. Macro expectations are strong to support prices, while fundamentals are biased.
On the supply side, the output of PVC production enterprises this week decreased by 0.45% month-on-month and increased by 1.65% year-on-year. Among them, the output of calcium carbide method enterprises decreased by 0.80% month-on-month and decreased by 3.22% year-on-year; the output of ethylene method increased by 0.75% month-on-month and increased by 22.17% year-on-year. In the next three weeks, output is expected to remain above 430,000 tons.
2019-2023 PVC production trend chart
(10,000 tons)
In terms of inventory, the warehouse inventory of production enterprises increased by 29% month-on-month after the holiday. Affected by the Spring Festival, the transportation of enterprises was limited, and downstream holidays. In the next three weeks, the inventory of enterprises is expected to maintain a growth trend due to the impact of high supply and slow demand recovery.
Weekly data trend of factory warehouse inventory of PVC production enterprises in China
(10,000 tons) (Yuan / ton)
The black line in the above picture is the stock
The red line in the above picture is the price
In terms of demand, domestic downstream product companies are expected to resume work next week, and production demand will increase slowly; international market demand is improving, and foreign trade prices are still bullish in March, and export demand is still expected.
2020-2023 Trend Chart of China's PVC Downstream Product Enterprises Operating Rate
The red line in the above figure is: the total operating rate of downstream products
The blue line in the above figure is: profile product operating rate
The gray line in the above figure is: operating rate of pipeline products
On the cost side, semi-coke companies lost 190.7 yuan/ton, and calcium carbide companies lost more than 70 yuan/ton, due to price reductions; calcium carbide-based PVC is under the pressure of tight calcium carbide prices, and the average gross profit of domestic manufacturers is -715 yuan/ton. The gross profit of the chlor-alkali-PVC industry chain in the east dropped to -490 yuan/ton, and the profit of chlor-alkali was weak to the industry, and the production pressure of marginal enterprises in the east increased. The cost of calcium carbide is firm. After the festival, with the smooth transportation, calcium carbide stabilizes mainly, the downstream demand is expected to be good, and the sales price is firm.
In the short term, after the Spring Festival, the recovery of PVC market demand is slow, the supply side of production enterprises is growing steadily, and the industry's inventory is greatly accumulated during the festival. More, the disk prices continue to look high.
From a mid- to long-term perspective, market demand is slowly recovering, and economic and environmental expectations remain to be seen. In view of the time required for the peak season, the market center of gravity is expected to be low due to oversupply, and PVC prices have a downward trend under supply pressure in February.
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