There is limited room for PVC to continue to fall.

When policy risks hit, market sentiment deteriorated as a whole, and chemical products all declined to varying degrees, with PVC being the most pronounced correction. In just two weeks, the decline was close to 30%. PVC quickly fell below the 60-day moving average and returned to the price range in mid-September. It closed at 9460 yuan/ton in night trading on October 26. The main contract holdings tended to stabilize, and the market was oversold. Will return to rationality.

Supply is not really relaxed

The National Development and Reform Commission has deployed a number of policies and guidelines to increase coal supply, and the resource supply and demand gap has been eased, but electricity will be given priority to residential electricity. Calcium carbide and PVC are high-energy-consuming industries. The situation of electricity and production restrictions is still not optimistic, and the operating rate is difficult to achieve. Significantly improved. According to data on October 21, the starting load of calcium carbide method PVC was 66.96%, an increase of 0.55% month-on-month, and the starting load of ethylene method PVC was 70.48%, an increase of 1.92% month-on-month. The overall start of construction is still at an absolute low level.

The dual energy consumption control policy has not shown signs of relaxation, so although the supply margin has improved, the start of calcium carbide and PVC will still be restricted. As of October 26, the price of calcium carbide in Shandong was RMB 8,020/ton, and the price of PVC in East China was RMB 10,400/ton. The weak operation of PVC in recent days will affect the price of calcium carbide, but the market is expected to stabilize the price while seeking a balance, and the callback rate of calcium carbide is likely to be less than that of PVC.

Poor demand performance

Demand has performed poorly in the process of falling prices. Downstream factories are buying up and not buying down. The wait-and-see sentiment is strong. Most of them only maintain just-needed purchases. The superimposed cost weakness will temporarily suppress the rebound in PVC prices. The sharp decline in PVC eased the early pressure on the downstream, factory profits will certainly pick up, and the start-up is expected to rise, but the overall demand is more elastic relative to supply, and it has been relatively stable and will not become a major driving force.

Although the property tax policy is negative on the demand side of PVC, the specific impact will only be reflected in a longer period and will not immediately impact the disk. The latest data shows that the downstream operation is the same as last week, with 64% of the downstream operating rate in North China, 77% of the downstream operating rate in East China, and 70% of the operating rate in South China. The operating performance of soft products is better than that of hard products, with soft products operating at about 50% and hard products at about 40%. The PVC downstream start-up data was relatively stable during the week, and remained weak and stable in the follow-up.

Go to the library smoothly

Market panic has not completely dissipated, spot prices are in the stage of falling, and all parties in the industry chain have no willingness to replenish warehouses. The willingness to go to warehouses in the upper and middle reaches is strong. Downstream procurement is mainly based on rigid demand, but the absolute level of overall inventory is at a low level over the same period. Analyzing data from previous years, we found that social inventory was de-allocated from October to November. As of October 22, the sample size of social inventory was 166,800 tons, which continued to drop by 11,300 tons from the previous month. East China inventory was de-removed more rapidly. Keep going to the library rhythm.

Under the premise that midstream traders are mainly destocking, upstream inventory has accumulated slightly. The latest data shows that the upstream inventory sample is 25,700 tons, an increase of 3,400 tons from the previous month, which is the lowest level in the same period in the past five years. Downstream production started steadily, and when the price of PVC fell, the intention to receive goods was weak, and it continued to digest its own raw material inventory, and at the same time, the inventory of finished products was also slightly reduced. There is no pressure on the overall inventory of the industry chain for the time being, and this round of price decline has little to do with fundamentals.

From the perspective of profit analysis, under the dual drive of coal and PVC prices, calcium carbide will also open a downward channel. According to statistics, calcium carbide in Wuhai area will be lowered by 300 yuan/ton for traders, and the ex-factory price will be 7,500 yuan/ton on October 27. The price of caustic soda will also fall, and the break-even point of the chlor-alkali unit will drop accordingly. Under multiple factors, the short-term pressure on PVC will be weak and oscillating until the profit of the industrial chain is rebalanced.

A comprehensive analysis found that the rate of increase in coal prices on the disk was basically retreated. Under the influence of policies, the price of PVC in the short term will still be under pressure, but there is little room for subsequent declines. Under the guidance of policies, the market will return to rationality, price trends will again be dominated by fundamentals, the weak balance of supply and demand will continue in the fourth quarter, and prices will slowly bottom out during the destocking process. The market outlook is concerned with the energy consumption dual control barometer data in the third quarter and the strength of the energy dual control policy in November. It is recommended that the V1-5 spread below 300 can participate in the positive set.

MOSCOW (MRC)–Russia’s overall production of unmixed polyvinyl chloride (PVC) totalled 828,600 tonnes in the first ten months of 2021, up by 3% year on year, according to MRC’s ScanPlast report.

October production of unmixed PVC dropped to 81,900 tonnes from 82,600 tonnes a month earlier,  lower output was caused by a scheduled  shutdown for maintenance at Kaustik (Volgograd).

Overall output of polymer totalled 828,600 tonnes in January-October 2021, compared to 804,900 tonnes a year earlier. Two producers increased their production, whereas two manufacturers maintained their last year’s figures.

RusVinyl’s overall output of resin reached 289,200 tonnes in the first ten months of 2021, compared to 277,100 tonnes a year earlier. Higher production was mainly caused by the absence of a shutdown for maintenances this year.

SayanskKhimPlast produced 254,300 tonnes of PVC in over the stated period, compared to 243,800 tonnes a year earlier.

Baskhir Soda Company’s overall output of resin reached 222,300 tonnes in January-October 2021, which virtually corresponds to the last year’s figure.

Kaustik (Volgograd) overall production of resin reached 62,700 tonnes over the stated period, which corresponds to the last year’s figure.

MRC, a partner of ICIS, produces polymers news and pricing reports from Russia, Ukraine, Belarus,