Pricing Trends

According to Todudu (calcium carbide root plant average price) monitoring data, July 23 domestic mainstream PVC average price of 6487.5 yuan / ton, up 3.8% from the beginning of the month, the month rose 2.98%. Compared with last month, down 3.64%.

Analytical Review

Since July, the PVC market has shown a trend of rising and then mildly falling. As the futures strengthened during the month, the spot market became more active, but the demand could not keep up. Therefore, even a slight change in fundamentals could not support a sustained rise. It is normal for PVC market to have a reasonable adjustment after a continuous rise of 5.36% in early July. As the adjustment is not large, manufacturers are still supporting prices. Recently, affected by the rainy weather in the south, PVC spot market stabilized, with limited demand and relatively stagnant market transactions. Some manufacturers gave discounts on shipments, and downstream demand was dominated by strict replenishment. Product supply is tight in some areas, bookings are good, and the industry is holding a wait-and-see attitude. 

At present, the demand side is still supported and social inventory adjustment is still in progress. Short-term reasonable adjustments do not need to be pessimistic, there are positive factors such as plant maintenance, local supply tightness and rising costs. In the spot market, according to Thodudu monitoring data, as of July 23, the domestic calcium carbide PVC five mainstream price range of 6350 ~ 6650 yuan / ton. At present, the mainstream price range of calcium carbide PVC in East China is 6,500~6,600 yuan/ton, and the mainstream price range of calcium carbide PVC in Hebei is 6,420~6,500 yuan/ton, and the mainstream price range of domestic calcium carbide PVC is 6,420~6,500 yuan/ton. The price range is 6,420~6,500 yuan/ton. Hangzhou calcium carbide processing PVC 5-type offer 6,520~6,600 yuan/tonne, Guangzhou ordinary PVC domestic mainstream price range of 6,520~6,600 yuan/tonne, the price fell slightly. Futures, Thursday V2009 contract opened at 6545 yuan, the highest price of 6630 yuan, the lowest price of 6520 yuan, down 55 yuan (0.83%). Volume increased by 41,000 lots to 164,000 lots. Positions decreased by 244,000 lots to 162,000 lots.

On the demand side, the downstream work rate declined because July is the off-season and the downstream has many rainy days. Although PVC prices continue to rise, manufacturers are not very enthusiastic about stocking up. Most of them are strictly purchased, some are supplements. In terms of specific industries, the start rate of pipeline plants is at a medium level and medical demand is good, but the performance of other manufacturers is still unsatisfactory. Overall, PVC market demand has picked up, but the support is still weak.

Data show that the total apparent consumption of PVC in January-June was 1,051,000 tons, down from the previous year. Compared with 10,106,500 tons in the same period in 2019, the average monthly apparent consumption was about 1,675.3 million tons, a slight increase over the same period last year.

On the supply side, the number of maintenance companies was low in July, but the supply burden was not significant due to the reopening of existing maintenance companies and the increase in production capacity. In South China, product supply is still tight, but most of them have been pre-sold and sold without burden, which enhances the confidence in maintaining prices. With the gradual postponement of the arrival of imported goods at the port, maintenance enterprises will gradually recover, production capacity continues to increase, and new production capacity will gradually be put into production with sufficient supply.

According to the latest data released by the National Bureau of Statistics, domestic PVC production in June 2020 was 1.631 million tons, an increase of 2% over last year. From January to June 2020, the cumulative output of domestic PVC was 9.688 million tons, down 3.2% year-on-year.

Crude oil, the U.S. WTI crude oil futures market on July 22 is a downward trend, the main contract balance sheet fell $ 0.02 to $ 41.90 per barrel. Brent crude oil futures market prices rose, the main contract balance sheet showed an increase of $0.03 to $44.29 per barrel. There were no major changes in oil prices on Wednesday. data released by API showed an unexpected increase in U.S. crude oil inventories and EAI data showed an unexpected increase in crude oil and distillates. In addition, tensions between the US and China increased.

As far as ethylene is concerned, there is a slight upward trend recently. As of 22nd, CFR Northeast Asia purchasing price was $795~805/mt and CFR Southeast Asia purchasing price was $710~720/mt. In the European ethylene market, the FD purchase price in Northwest Europe was $754~764/mt, and the CIF purchase price in Northwest Europe was $695~703/mt. Generally speaking, the ethylene markets in Europe, the United States and Asia have been growing steadily in recent years due to good demand for ethylene. However, the trading atmosphere was average and the rise was not obvious as oil prices continued to fluctuate between $40. The market is in a state of instability as production cuts in several countries are being implemented at more than 100%. In addition, positive supply and demand support the crude oil market and provide cost support for ethylene. As ethylene has remained at lower levels for an extended period of time, Todudu Data analysts forecast future price action for ethylene.

In terms of calcium carbide, it rose sharply in late July amid minor fluctuations. As of July 23, the mainstream calcium carbide manufacturers prices rose slightly to 2,530 yuan / ton. Lower upstream commodity prices weakened the support for calcium carbide. Although the downstream situation of PVC has declined, the magnitude is limited, and the motivation of downstream customers to buy calcium carbide is still weak. Due to the current lack of calcium carbide production, calcium carbide supply is insufficient, it is expected that the price of Northwest calcium carbide will rise slightly in late July.

Market Outlook

Toodudu PVC analysts believe that the current PVC futures shock, spot market fluctuations. Some enterprises choose to give up part of the profit sales products, the trading atmosphere is flat. Although off-season demand is low, but support is still in place, short-term good maintenance continues. Overall, PVC fluctuations are small, the possibility of a callback is greater, need to pay attention to the future trend.

For any queries, please feel free to contact tddd Toodudu-global@toodudu.com.