Positive factors support further gains in the PVC market

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July 13, 2016, China Chemical Products Network. I. Market Overview: On July 12, the August futures price of U.S. WTI crude oil rose by 2.04%, closing at $46.80 per barrel. Brent crude oil September futures rose 2.22% on Tuesday to close at $48.47 per barrel. The impact of the Northwest Enterprises Joint Meeting continues to grow; today’s domestic PVC market saw a significant rise, with prices offered by traders in various markets continuing to increase. Although downstream manufacturers are resistant to high prices, the current shortage of some spot supplies in various markets is keeping high prices in force ； Upstream manufacturers have successively raised their ex-factory prices, supporting high prices in the market; it is expected that the PVC market outlook will remain positive tomorrow as well. II. Upstream raw materials: On July 12, prices of ethylene in Asia remained stable, with CFR Northeast Asia settling at 1134.5–1136.5 dollars per ton, and CFR Southeast Asia at 1094.5–1096.5 dollars per ton. . The sales performance of calcium carbide manufacturers is average, with many companies experiencing an increase in the time required for unloading at downstream locations. Local calcium carbide export prices: The prevailing export price for calcium carbide in Wuhai and Ordos areas in Inner Mongolia is 2100–2150 yuan per ton ； The ex-factory price of calcium carbide in the Shizuishan area of Ningxia is 2,150–2,200 yuan per ton ； The price in the Zhongwei region is 2,200–2,250 yuan per ton ； Shaanxi region: ex-factory price of 2,100–2,170 yuan/ton ； In Gansu region, it is 2,200–2,250 yuan per ton. III. Corporate Updates: Quotations from producers of PVC via the calcium carbide method have risen significantly. Type 5 ordinary calcium carbide material: the mainstream price at manufacturers in the surrounding areas of Inner Mongolia is 5,200–5,400 yuan per ton ； The mainstream acceptance price in Shandong region is 5,250–5,350 yuan per ton at the factory exit ； The mainstream ex-factory price in Hebei region is 5,250–5,350 yuan per ton on credit ； In the Shanxi region, the standard ex-factory price is 5,250–5,350 yuan per ton, payable upon acceptance. Overall, domestic PVC manufacturers using the ethylene process are currently mostly operating at a stable level. Currently, in the North China region, the ex-plant price for products from Qilu Petrochemical, Tianjin Dagu, and LG Dagu is 5,600–5,700 yuan per ton. In the East China region, the delivery price is 5,700–5,750 yuan per ton. Taiwan’s Formosa Plastics has quoted a price of 770 US dollars per ton CFR the main ports in China for July. IV. Market Trends: Domestic PVC market price quotes. Unit: Yuan/ton. Product type, Price changes in East China, Price changes in South China, Price changes in North China, Price changes in Northwest China: Calcium carbide-based materials SG-5: 6000–5700 +50; 5650–5750 +50; 5300–5350 +20; 5250–5300 +50. Ethylene-based materials: 10,000; 5750–5800 +50; 5750–5800; 5450–5550 +70. For ordinary Type 5 calcium carbide materials in East China, the prevailing prices are 5600–5700 yuan/ton for Zhongtai, 5680 yuan/ton for Beiyuan, 5700 yuan/ton for Sanlian, 5600–5610 yuan/ton for Yihua, 5600 yuan/ton for Yusheng and Yanhu, 5670 yuan/ton for Dongxing and Tianhu, 5620 yuan/ton for Shengxiong, and 5850 yuan/ton for Tianchen Tianneng ； Ethylene material: 5,750–5,800 yuan per ton. In the North China PVC market, at Qilu Chemical Industry City, the price of Qilu S700 is 5,630 yuan per ton, while the price of S1000 is 5,570 yuan per ton, with pickup available on-site. Calcium carbide material is delivered at 5,420–5,470 yuan per ton. Delivered in Linyi area at 5,400–5,450 yuan per ton. Hebei: 5,310–5,390 yuan per ton, pick up in person. In the Tianjin area, the price is 5,400 yuan per ton for pickup from the warehouse; for various models in Tianjin’s Dagu area and LG, the price is 5,650–5,700 yuan per ton for pickup. In the South China PVC market, the mainstream price for type 5 calcium carbide process is 5,650–5,750 yuan per ton; in Ordos, it is 5,760 yuan per ton. For the old plants of Zhongtai, Yili, and Junzheng, the price is 5,720 yuan per ton, while for the new plants of Shengxiong and Junzheng, it is 5,700 yuan per ton. Tianhu, Xinfafa, and Dongfang Hope have a price of 5,680 yuan per ton, Yanhu’s price is 5,620 yuan per ton, Sanlian’s price is 5,600 yuan per ton, and Tianchen and Tianneng’s price is 5,800 yuan per ton ； Dagu 1000/800/700 is priced at 5,800–5,850 yuan per ton ； The Dagu 1300 model is priced at 5,950 yuan per ton. V. Transaction Review: Today, the PVC market on the Plastics Exchange showed limited fluctuations. Looking at the market trends, contract prices varied across different regions, with some rising and others falling. The South China, East China, Southwest China, and Northwest China regions closed with slight price increases, while the North China region closed with a slight decline; trading volume was moderate during the day ； By the close, the South China settlement price for July was 5,675 yuan per ton (the same unit applies below), an increase of 5 ； The settlement price in East China is 5,600 yuan, up by 20 yuan ； The settlement price in North China is 5,350 yuan, a decrease of 15 yuan ； The settlement price for the ethylene method is 5,805 yuan, a decrease of 5 yuan. Fundamentally, the impact of the Northwest Enterprises Joint Meeting continues to unfold; today’s domestic PVC market saw a significant rise, with quotes from traders in various markets continuing to increase. Although downstream manufacturers are resistant to high prices, the current shortage of some spot supplies in various markets is keeping high prices in force ； Upstream manufacturers have successively raised their ex-plant prices, supporting higher prices in the market; it is expected that the PVC market conditions at the Plastic Exchange may see some improvement. VI. Future Market Outlook: Currently, PVC manufacturers do not face significant inventory pressures, and there is still a slight shortage of some spot supplies in the market. Traders hold an optimistic view regarding the future market and are inclined to maintain high prices. However, there is some resistance to an upward trend in the PVC futures market, as downstream demand is moderate and there is some reluctance to pay high prices. The PVC market is expected to remain stable and on the sidelines tomorrow