Slow progress; the PVC market continues to decline due to weak demand

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Slow progress in the market; PVC prices decline amid weak trends. April 8, 2016, China Chemical Products Network. I. Market overview for this week: The domestic PVC market has performed poorly this week, with trading remaining stagnant. Local prices have continued to drop slightly, as sellers offered discounts to sell their products. The main factors include, on the one hand, the weak fluctuations in international crude oil prices and the continuous decline in PVC futures prices, which dampen the enthusiasm of market participants and contribute to a bearish market atmosphere. On the other hand, since the start of the Spring Festival, the PVC market has been on an upward trend, but it is now showing signs of weakness. Demand in the future may have already been exhausted; purchasing enthusiasm among mid- and downstream industries has declined, and a sense of caution is growing in the market. Prices have entered a period of adjustment in order to eliminate the price bubble resulting from the excessive gains seen earlier. By the end of this weekend, the mainstream price for SG-5 produced by the calcium carbide method in East China was 5,340–5,500 yuan per ton, a decrease of 40 yuan per ton ； The mainstream price in South China is 5,400–5,520 yuan per ton, a decrease of 30 yuan per ton ； The mainstream price in North China is 5,300–5,400 yuan per ton, unchanged ； The mainstream price for the Ethylene Process Type 1000 in East China and South China is 5,720–5,760 yuan per ton. Quotations for the main domestic PVC market, unit: yuan/ton. Product, Model, East China, Price Change, South China, Price Change, North China, Price Change: Calcium carbide-based material, SG-5: 5390–5500, -50; 5400–5520, -30; 5300–5400, 0. Ethylene-based material: 1000, 5720–5760, 0; 5750–5800, 0; 5500–5600, 0. II. Manufacturer updates: This week, most PVC manufacturers are operating normally with limited inventory. Most of them have a positive attitude towards sales. In the coming period, some companies will enter maintenance periods, and they are determined to maintain high prices when selling their products. The mainstream price for type 5 ordinary calcium carbide in the areas surrounding Inner Mongolia is 5,100–5,200 yuan per ton at the factory; discounts are available upon settlement ； The mainstream acceptance price in Shandong region is 5,300–5,380 yuan per ton at the factory exit ； The mainstream ex-factory price in Hebei region is 5,150–5,350 yuan per ton upon acceptance ； In the Shanxi region, the standard ex-factory price is 5,150–5,200 yuan per ton, payable upon acceptance. The prevailing delivery price for enterprises using the ethylene method in East China is 5,700–5,800 yuan per ton. III. Upstream raw materials: The atmosphere in Asia’s VCM market was positive this week, with prices rising; CFR Far East increased by $5 per ton to $630–$631 per ton, while CFR Southeast Asia rose by $21 per ton to $670–$672 per ton. The price increase is mainly driven by a limited supply of raw materials, supported by rising prices of PVC in the downstream market. Apart from some price increases in line with market trends, this week new rises of around 30–50 yuan per ton were seen in the receiving prices of calcium carbide in regions such as Tianjin, the Northeast, Shanxi, and Central China. Prices continue to be adjusted flexibly by various regions based on their own supply situations; there are differences in the supply of calcium carbide to PVC manufacturers, with a mix of stable supplies, sufficient quantities available, and slight shortages. There have been occasional cases of declines in PVC maintenance or production activities, but for now this has a limited impact on the market supply and demand balance. There is little change in the operation of calcium carbide production; the calcium carbide produced by Junzheng is still exported, but this has little impact on the market. Supply in Ningxia remains somewhat tight, and calcium carbide manufacturers in various regions are unwilling to sell at low prices, with some still seeking higher selling prices. The competition between market supply and demand has intensified, with investors focusing on the maintenance status of PVC in the coming period. IV. Statistics on maintenance activities of domestic enterprises Unit: 10,000 tons Region, manufacturing enterprises, production capacity, and shutdown status: Southwest, Leshan Yongxiang – 12 tons; shutdown began on February 3, resumption of operations in mid-April; shutdown duration of around 50 days. East China: Tianjin Botian – Production will be halted starting March 5th, with relocation procedures beginning. Northwest China: Haimingyan – The plant will undergo routine maintenance on March 10th, with operations resuming on March 24th. Southwest China: Yibin Tianyuan – Maintenance is planned for around 10 days in late March. Southwest China: Sichuan Jinlu – The PVC plant is scheduled for maintenance in April. Northwest China: Inner Mongolia Yili – The company plans to carry out maintenance in April. Northwest China: Yanhu Haina – Production will be stopped for maintenance on March 19th; the maintenance is expected to last 15–20 days. Northwest China: Jinyuyuan – Maintenance is planned for 7–10 days at the end of March. Northwest China: Xinjiang Zhongtai – The 700,000-ton plant in Midong will start routine maintenance on March 29th; the maintenance is expected to last 3–4 days. Northwest China: Inner Mongolia Junzheng – The new 360,000-ton plant will stop operating for maintenance on March 29th; the maintenance is expected to last 10 days. V. Market Outlook: Today, the domestic PVC market has seen a slight decline, with significant drops in futures prices, which has greatly reduced enthusiasm among market participants. Trading activity in various domestic PVC markets is sluggish, demand is weak, and traders are lowering their prices in an attempt to facilitate sales. Upstream manufacturers are continuing to face poor order volumes, so they have started to lower their prices. The domestic PVC market is expected to decline slightly next week.