In terms of exports, the recent increase in orders received by enterprises has played a certain role in supporting prices. It is expected that the short-term PVC spot price will still fluctuate in a range.
With the adjustment of the domestic entry policy, strong market expectations reappeared, commodity futures rose as a whole, and PVC boards went up. However, the fundamentals of PVC spot are under great pressure, and the increase is obviously insufficient. In the process of rising, the willingness of the downstream to buy goods is low, and the sentiment of looking for low goods to buy goods remains unchanged. The overall market trading volume this week is at a mid-to-low level.
1. The social inventory ended the multi-period decline and turned into an accumulated inventory
As of December 25, the domestic PVC social inventory was 239,100 tons, an increase of 0.80% month-on-month, and an increase of 78.57% year-on-year; under the background of continuous increase in the start-up of PVC enterprises, and the approach of the end of the year, enterprises will gradually transfer the factory warehouse inventory to remote warehouses. The social inventory has entered the initial stage of accumulation after continuing the decline for several periods.
2. The price of PVC continues to fluctuate, but the transaction volume is tepid
Since the release of the domestic epidemic in early December, domestic demand has not been restored due to various circumstances. On the contrary, due to insufficient workshop personnel and other reasons, downstream start-ups have shown a weakening trend. In terms of market transactions, some downstream companies have a certain promise for the market after the liberalization, and at the same time combine their own conditions to find low stocking. In terms of prices, there is an obvious sentiment of not chasing higher prices.
In 2022, PVC manufacturers of different raw materials will maintain a high-load production state, mainly driven by better alkali profits. However, in terms of profit per ton of PVC, the profits of manufacturers of purchased raw materials will be at a loss for most of the year. Entering December, with the decline of upstream raw materials to varying degrees, the superimposed price of PVC fluctuated and rose, and the profitability of enterprises improved.
In December, the cost of different production sources decreased to varying degrees compared with November, but domestic PVC prices showed a slight upward trend due to the superimposition of macro policy stimulus and favorable factors such as exports. in the negative region. Among them, PVC production enterprises that purchased calcium carbide suffered slightly larger losses. As of December 29, the average gross profit of outsourced calcium carbide PVC production enterprises in December was -525.32 yuan/ton, which was 48.72% higher than that in November; Up 12.20%.
Due to the different ways of obtaining raw materials for the ethylene process, the production costs vary widely among enterprises, and the rise and fall of conversion to enterprise profits also show differences. As can be seen from the figure above, the overall profitability of enterprises that purchase vinyl chloride is relatively poor, and they are in a state of loss for most of the year, while the gross profit of enterprises that supply vinyl chloride is relatively good. As of December 29, the average gross profit of outsourced vinyl chloride PVC production enterprises in December was 46.10 yuan/ton, entering a situation of turning losses into profits, an increase of 103.68% compared with November's gross profit; the average gross profit of self-provided vinyl PVC production enterprises was 989.86 yuan/ton tons, an increase of 99.16% compared with November gross profit.
At present, the PVC market is swinging between weak reality and strong expectation, and the weak domestic demand is a foregone conclusion. In terms of exports, the recent increase in orders received by enterprises has played a certain role in supporting prices. It is expected that the short-term PVC spot price will still fluctuate in a range.
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