Narrow-range consolidation; fluctuations in the PVC market

Thread Content

Narrow-range fluctuations in the PVC market; mixed trends observed. July 6, 2015, China Chemical Products Network. I. Market overview: International crude oil prices are under pressure and declining, which has led to a weakening of petrochemical products as well. The PVC spot market is characterized by somewhat chaotic pricing patterns, with both rises and falls occurring. PVC manufacturers do not face significant inventory pressures, and some of them have even increased prices slightly. However, trading in various markets remained sluggish, with quotes declining in East China and South China. II. The price of ethylene in Asia, the upstream raw material, has fallen. CFR Northeast Asia closed at $1,299.5–$1,301.5 per ton, down $30 per ton ； CFR Southeast Asia closed at $1,284.5–$1,286.5 per ton, down by $15 per ton. Today, the price of calcium carbide remains stagnant; production of calcium carbide in Wuhai and its surrounding areas is unstable, as supply and demand in the market continue to be in conflict. PVC manufacturers have sufficient supply of calcium carbide, with prices remaining stable and a wait-and-see attitude prevailing. III. Corporate Updates: Today, there have been few changes in the pricing of PVC manufacturers that use the calcium carbide process in China; in some areas, prices continued to rise, especially in Central and North China. Type 5 ordinary calcium carbide material: the prevailing ex-factory price in the areas surrounding Inner Mongolia is 5,400–5,500 yuan per ton ； The mainstream acceptance price in Shandong region is 5,650–5,750 yuan per ton at the factory exit ； The mainstream ex-factory price in Hebei region is 5,500–5,600 yuan per ton on credit ； In the Shanxi region, the standard ex-plant price is 5,600–5,650 yuan per ton, payable upon acceptance. The pricing for PVC produced via the ethylene method remains stable; at companies in North China such as Qilu Petrochemical, Tianjin Dagu, and LG Dagu, the price at the factory is 5750–5900 yuan per ton. In East China, the prices of various major manufacturers range from 6000–6200 yuan per ton, with discounts available for large orders. The price for Taiwan’s Formosa Plastics on a USD basis is 860 USD per ton CFR the main ports in China. IV. Market Trends: Domestic PVC market price table. Unit: yuan/ton. Product type, East China price change, South China price change, North China price change: Calcium carbide-based material SG-55: 55,500–56,500; 30,5620–57,500; 20,5500–56,500. Ethylene-based material: 10,000; 59,000–59,500; 59,200–60,000; 57,500–58,000. The prevailing price in the East China PVC market is 5,560–5,660. Changzhou Yihua: 5560 for pick-up, Beiyuan: 5650, Yanhu: 5600. Shanghai Tianchen 5560, Type 3 5850, Type 8 5790. Hangzhou Zhongtai 5660; Sanlian and Yihua 5580 for pick-up; Tianchen Type 5 at 5600, Type 3 at 5870, Type 8 at 5800. Ethylene material: 5900-5950. In the North China PVC market, Qilu S700 and Qilu S1000 from Qilu Chemical Industry City are available at 5780–5830 yuan, for pick-up in person. Calcium carbide material of 5600-5650 will be delivered. Delivered to Linyi area from 5650 to 5680. Delivered to Hebei 5500-5550. Pickup available at warehouse 5530-5580 in Tianjin area; for various models in Tianjin’s Dagu and LG locations, pickup is available at 5750-5800. The mainstream PVC price in South China is 5620–5750 for Type 5; Zhongtai quotes 5650, Yihua offers 5620, Junzheng reports 5650, Yanhu sets the price at 5660, Dongxing has a price of 5640, Tianhu is at 5680, Shengxiong also lists 5680, E’erong quotes 5630, while Tianneng/Tianchen charges 5680; Sanyuan San has a price of 5750. Dagu 1000 is at 5920. V. The trading situation: The Greek referendum rejected the international bailout plan; now that Greece no longer has the protection of financial assistance programs, how long it can retain its status as a member of the eurozone depends on the extent to which the European Central Bank is willing to provide liquidity to Greek banks. The Greek crisis triggered turmoil, with crude oil prices falling continuously, which caused petrochemical products to weaken as well. Wide-range fluctuations were seen in PVC prices, with significant disagreements between bulls and bears. By the close, the price of calcium carbide-based product in South China for July was 5,641, down by 47 ； The price in East China was 5,660, up by 10; the price for the ethylene method was 5,950, also up by 10. The fundamentals in the spot market are unfavorable; commodity prices have dropped significantly, with markets in East and South China following this trend downward, while there has been little change in the North China region for now. It is expected that the price of Guangpu plastics will fluctuate within a narrow range in the short term. VI. Market outlook: Today’s PVC market is seeing slight adjustments, with pricing somewhat chaotic. Sales at high prices are poor in the East China and South China regions, as most sellers offer discounts. There is limited available stock in Shandong, which continues to drive up prices in the market. At present, although the price of calcium carbide in the upstream sector has seen a slight increase from its low levels, overall changes remain minimal; meanwhile, the ongoing decline in crude oil prices continues to affect market sentiment. It is expected that the market will remain in a state of narrow consolidation in the short term, with limited room for gains or losses.