Since March, the domestic polyvinyl chloride (PVC) market has continued to decline and reduces the trend of weak prices. The PVC market has continued to organize a continuous low level. Although it has been briefly lifted back in late March, based on the characteristics of current low demand, high inventory of enterprises, and low market participation, the industry generally believes that the PVC market is difficult to recover in the short term.

“Since the beginning of the year, the mainstream transaction price of the domestic PVC market has remained at 6,100 yuan to 6,300 yuan (ton price, the same below). At the end of March, the price of the stone stone method was about 6150 yuan, a 3%month -on -month; %, The market is softened again after a brief look up. This weak adjustment trend makes many compatible PVC chlor -alkali companies helpless. At the same time, these companies can only be balanced with limited production and insurance prices for liquid chlorine consumption. It is expected that it is expected that it is expected This embarrassing situation will not change in a short period of time. “Shao Huiwen, a senior commentator of the market, said.

Low demand is difficult to change

Henan chlor-alkali related person said: “Due to the current downturn in the domestic real estate market and the slow recovery of the construction market, it is difficult to support the demand for PVC, the purchase order of the terminal enterprise is insufficient to follow up, restricting the PVC market recovery. This situation has continued to suppress the price since the second half of last year. In this context, we have no choice but to stop the PVC device in stages. We can only consider normal production after the inventory is digested. At the same time, in the background of the weak market, some production enterprises under great financial pressure in order to maintain the liquidity of funds and reduce inventory pressure choose to make profit shipment, triggering a ‘domino’ effect in the industry, in a short period of time, the situation of falling market is difficult to change, the market recovery still needs time.”

From the progress of new chemical projects this year, the possibility of short-term improvement of PVC terminal demand is not big. According to the person in charge of a chemical enterprise in Henan province, due to the early production of chemical projects faced with the adverse situation of market contraction, this year they investigated the later market, decided to temporarily shelve the planned investment and construction of two chemical projects in Ningxia, the procedures have been basically complete. He said the phenomenon of shelving projects under construction is not rare, indicating that the recovery of the construction market has not yet arrived, and the industry wait-and-see atmosphere continues.

Persistent high inventory

According to statistics from Henan Chemical Network, the average operating rate of domestic PVC devices in March was 77.45%, an increase of 0.78%month -on -month. Among them, the operating rate of the electric stone method was 75.87%, an increase of 0.30%month -on -month; the operating rate of the ethylene method was 83.19%, an increase of 3.37%from the previous month. Beginning in November last year, the PVC operating rate has increased steadily, and the average operating rate of 5 months has increased by about 10%. The high operating rate of downstream low demand superposition devices has made the current PVC’s social inventory remain high. Among them, the total inventory of PVC inventory in the two regions of East China and South China increased from 250,000 tons at the beginning of the year to 530,000 tons in March, an increase of 112%.

“The high inventory status is not eliminated, and the negative role of the market will continue. Another reason for this high inventory status is that PVC companies generally have chlor -alkali facilities, liquid chlorine is not easy to save. PVC is the main product consumed by liquid chlorine. The alkaline chlorine balance of chloro -alkali enterprises, the PVC device cannot restrict the production significantly, so there is also a state of continuous high inventory of PVC. “Wang Xiaoxian, deputy general manager of Henan Lianchuang Chemical Engineering, said.

Low market participation

“Due to a period of time for PVC terminal demand is not prosperous, traders into the market enthusiasm is not high, not to mention inventory, in addition to downstream manufacturers on demand procurement, the growth of social inventory basically maintained in the production enterprises. “After the outbreak of COVID-19, the recovery of the real estate market and construction of projects has been slow, so the expected recovery of the market and the acceleration of circulation has not happened, which is one of the main reasons for the low participation in the market.” Li Bing, a trader in Henan, said.

Market front-line reflected, early April, in the downstream low demand does not change, under the background of high enterprise inventory continued, the price of raw calcium carbide also fell again, the domestic mainstream transaction price fell from about 3600 yuan at the beginning of the month to about 3500 yuan at present, a decline of 2.7%, low-end prices even fell by about 5%, further weakening the cost support ability of PVC, Market wait-and-see mentality, resulting in mid-April PVC again down 100~200 yuan, at the same time volume also appeared shrinking trend, the follow-up market is still facing a test.

Industry insiders said that the upcoming maintenance season has a certain support for the PVC market in the short term, and the market will not decrease significantly, and it is expected to stop falling and stabilize. However, from the perspective of the existing scale of the domestic PVC, the production capacity of the maintenance manufacturers is limited, coupled with the existing high inventory status, the supply side is still loose, and the terminal demand has not improved significantly in the short term. Therefore Essence It is recommended to focus on the recovery situation of demand, the digestion of high -inventory of enterprises, and the changes in several indicators such as market activity, and make timely risk prediction and control.

Post time: May-08-2023