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Weak trading drives the PVC market lower; it declined on a negative note. July 27, 2016. Source: China Chemical Products Network. I. Market overview: On July 26, U.S. WTI crude oil futures for September closed down 0.21%, at $42.92 per barrel. September futures for Brent crude rose by 0.15 to $44.80 per barrel. Today, the domestic PVC market remained calm; downstream buyers purchased goods as needed, with slow demand. There was a strong tendency among merchants in various markets to wait and see. Sales of PVC made from calcium carbide declined significantly, with prices falling ； Upstream manufacturers have low inventory levels, so they sell at high prices, which helps to sustain market prices. II. Upstream raw materials: On July 26, prices of ethylene in Asia declined; CFR Northeast Asia dropped by 25 to settle at $1,094.5–$1,096.5 per ton, while CFR Southeast Asia fell by 25 to end at $1,034.5–$1,036.5 per ton. The supply of calcium carbide is uneven, with overall slight shortages. Local calcium carbide ex-factory prices: The prevailing ex-factory price for calcium carbide in Wuhai and Ordos areas in Inner Mongolia is 2,050–2,100 yuan per ton ； The ex-factory price of calcium carbide in the Shizuishan area of Ningxia is 2,100–2,200 yuan per ton ； The price in the Zhongwei region is 2,200–2,250 yuan per ton ； In the Shaanxi region, the price at the factory is 2,100–2,170 yuan per 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 remain stable for now. Type 5 ordinary calcium carbide material: the prevailing ex-factory price in the areas surrounding 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 mainstream 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 810 US dollars per ton CFR the main ports in China for August. IV. Market Trends: The prevailing price for ordinary Type 5 calcium carbide in East China is 5,500–5,600 yuan per ton. Reference prices are as follows: Sanyuan and Yihua at 5,530 yuan/ton, Yanhu at 5,540 yuan/ton, Dongfang Hope at 5,550 yuan/ton, Zhongtai at 5,610 yuan/ton, Tianhu at 5,570–5,590 yuan/ton, Dongxing at 5,570–5,590 yuan/ton, Junzheng at 5,610 yuan/ton, Shengxiong at 5,550–5,560 yuan/ton, Beiyuan at 5,650 yuan/ton, while Tianchen, Tianye, and Tianneng charge 5,650–5,670 yuan/ton ； Ethylene material: 5,850–5,900 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 delivery available upon pickup. Calcium carbide 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. The mainstream price for Type 5 calcium carbide process PVC in the South China market is 5,580–5,680 yuan per ton ； Zhongtai and Yili: 5,680 yuan per ton; Junzheng’s new and old factories sowie Tianhu: 5,660 yuan per ton; Dongfang Hope and Ordos: 5,640 yuan per ton; Shenghua, Xinfaa, and Haina: 5,630 yuan per ton; Yanhu: 5,600 yuan per ton; Sanlian: 5,580 yuan per ton ； Beiyuan: 5,680 yuan per ton; Type 8: 5,770 yuan per ton ； Dagu 1000/800/700 is priced at 5,920–5,970 yuan per ton ； The Dagu 1300 model is priced at 5,970 yuan per ton. V. Transaction Review: Today, the PVC market on the Plastics Exchange showed weak performance. During trading hours, traders in various regions switched to different contract months, with transactions taking place only in the South China region for the July contract ； Affected by the weak market conditions, there is an increasing supply of goods at low prices in the market ； By the close, the settlement price for Type 7 in South China on July 5 was 5,680 yuan per ton (the same unit is used below), a decrease of 50 yuan ； The settlement price in South China on August 5 was 5,700 yuan, a decrease of 139.09 yuan ； The settlement price in East China is 5,620 yuan ； The settlement price in North China is 5,375 yuan, up by 45 yuan ； The settlement price for the ethylene method is 5,900 yuan. Fundamentals: The domestic PVC market remains calm; downstream buyers purchase based on their needs, with slow progress in transactions. There is a strong tendency among merchants in various markets to wait and see. Sales of PVC made from calcium carbide have declined significantly, with prices falling ； There is still some room for further price increases in ethylene. Upstream manufacturers have sufficient inventory, so they maintain high prices when selling their products, thereby supporting market prices ； It is expected that PVC on the short-term plastics exchange will remain in a state of weak consolidation. VI. Market Outlook: The atmosphere in the domestic PVC market remains sluggish; traders in the three main regions of East China, South China, and North China continue to face poor sales, with prices continuing to decline ； Downstream manufacturers tend to purchase as needed, and market participation remains low; the confidence of traders in the PVC market is difficult to boost. It is expected that the trend of decline in the domestic PVC market will continue tomorrow.