At the beginning of November, the domestic PVC market continued to rise. At present, the price of calcium carbide process products in East China is close to 7500 yuan (ton price, the same below), and ethylene process products are also reaching 8000 yuan, a three-year high.
In the author's opinion, in the near future, Northwest China's devices are under centralized maintenance, the domestic supply is tight, and the downstream real estate demand is good. At the same time, the unstable start-up of European and American plants and the rise of external prices have promoted the upward trend of PVC market.
On the supply side, affected by the epidemic situation, the new PVC production capacity this year is limited. Most of the 5 million T / a plants originally planned to be put into operation were delayed. According to statistics, as of the end of October, only the 400000 T / a ethylene process PVC plant of Qingdao Gulf Chemical Co., Ltd. and the 100000 t / a paste Resin plant of Zhongtai Chemical Co., Ltd. were successfully put into operation. Before the end of the year, the 400000 T / a unit of Wanhua chemical is likely to be put into operation, and there are uncertainties in other new units. It is estimated that the new capacity of this year will be around 1 million tons, with an annual growth of less than 4%.
In addition to the impact of the epidemic, the national restrictions on PVC projects are also one of the reasons for the slow expansion of production capacity. By the end of 2019, China's total PVC production capacity is about 26 million tons, including paste resin production capacity of 1.2 million tons, with a self-sufficiency rate of 99%, and the industry has been in a saturated state. In addition, some of the old devices have hidden dangers in the production process. In recent years, accidents occur frequently, which brings some bad effects to the society. Therefore, in April 2019, the national development and Reform Commission issued the Guiding Catalogue of industrial structure adjustment, which clearly limits the annual production capacity of calcium carbide PVC and ethylene process PVC with annual production capacity of less than 200000 tons and ethylene process PVC of less than 300000 tons, so the capacity expansion slows down.
In terms of demand, although the traditional off-season is coming, with the blessing of the shopping season a year ago, the PVC industry is not weak in the off-season, especially in the terminal real estate market, which has a strong demand for pipes and profiles. In addition, after entering winter, the climate in the northern hemisphere is getting colder, and the epidemic situation still needs to be prepared. The price of PVC Paste Resin remains high, which has certain support for the spot market of PVC.
In terms of import and export, customs data showed that China's PVC import volume reached 914000 tons from January to September, an increase of 61.8% over the same period last year; the export volume from January to September was 369000 tons, a year-on-year decrease of 17.8%. At the end of October last year, China's anti-dumping of PVC from the United States, South Korea and Japan expired, resulting in a significant increase in PVC imports this year. Around the national day of this year, the Ministry of Commerce issued an anti-dumping and countervailing investigation on PVC imports from the United States. The anti-dumping policy may reduce the import volume in the fourth quarter, bringing support to the domestic market.
On the whole, the PVC price has reached the highest level in three years, and the power to continue to rise in the future market is slightly insufficient. When the overhaul of this wave of devices is completed, the market may have a narrow range of correction expectations. However, from the perspective of supply and demand in the later stage, the market has strong resistance to fall, and the possibility of price falling sharply is not large. PVC may maintain a high consolidation situation before the year.
