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Why pvc resin price is so high...?

15-09-2021

Why pvc resin price is so high...?

Recently, with the improvement of the overall atmosphere of the commodity market, PVC has been a strong performance to hit a new high, since the beginning of the year, the current price has risen more than 40%, in the background of carbon neutrality, supply will continue to shrink, at the same time, strong demand resilience, inventory at a low level in the same period, PVC after the market is easy to rise and difficult to fall.

1.The supply is limited

In north west China, Where the largest capacity of pvc is concentrated Under the current situation of autumn maintenance, the policy increase will further reduce the start of work, and intensify the shortage of supply. PVC comprehensive operation rate decreased from month to month, including calcium carbide method and ethylene method, and the number of maintenance enterprises increased significantly. It is expected that the maintenance loss in September will exceed that in August, reaching 180,000 tons.

PVC made of calcium carbide in China accounts for more than 80%, which has high energy consumption and pollution in the production process. At present, with the increasing attention to environmental protection, calcium carbide PVC ratio will gradually decline. At present, other production capacity has not been put into production, calcium carbide process start-up is limited, the supply gap will gradually expand for a long time in the future.

 

2.The cost is high

Calcium carbide procurement cost accounts for nearly 67% of PVC production cost by calcium carbide method. The high cost has brought great burden to PVC upstream manufacturers. Upstream profit has been negative since July, and it is estimated that the average profit from July to now is -268.06 yuan/ton. The extremely low profit level compared with the previous year can hardly support the production enterprises to maintain high load operation, which eventually leads to the continuous decline of PVC operation rate and the deterioration of the flow of goods shortage pattern.

3.Demand is stable

In the golden season approaching, even if the demand improvement is not as good as in previous years, and PVC price high expectations to suppress demand performance, from the end of the order volume, the whole downstream demand toughness is still strong, but downstream manufacturers can only accept high prices, the overall demand will remain stable.

Generally speaking, the tight supply pattern will continue, the stability of steel demand determines that downstream enterprises can only passively accept high prices, and the price in the PVC period is easy to rise and difficult to fall. In the short term, the negative factors are less resistance, the overall PVC industry chain is dominated by multiple factors, calcium carbide tight problem is difficult to solve in the short term, the very low inventory level creates favorable conditions for the rise, if the market demand improves, PVC upward channel will be completely opened. PVC price is expected to remain high in the future, and is likely to rise to more than 10000 yuan/ton.


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