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Multiple positive factors converge, driving PVC prices up strongly. September 21, 2016. I. Market overview: Today, domestic PVC prices have risen strongly, with futures prices for PVC also showing a slight increase. The shortage of supply continues to support rising market prices, trading remains active, and transaction prices are increasing in various regions. The increase was most noticeable in East China, while the increase in South China slowed down slightly. However, with the National Day holiday approaching, intermediaries have become less proactive in following up. The market is expected to continue rising tomorrow as well. II. Upstream raw materials: On September 20, the October contract for U.S. WTI crude oil closed up $0.14 at $43.44 per barrel. Meanwhile, the November futures contract for Brent crude oil closed down $0.07 at $45.88 per barrel. On September 20, prices for ethylene in Asia remained stable, at 1179.5–1181.5 USD/ton for CFR Northeast Asia, and 1049.5–1051.5 USD/ton for CFR Southeast Asia. Today, some purchase prices for calcium carbide rose accordingly; meanwhile, several PVC producers have also initiated another round of price hikes. Today marks the first day of implementation of the new traffic regulations; in various regions, most transport vehicles remained idle, with very few vehicles being used for deliveries. As a result, calcium carbide factories across the country have accumulated excess inventory, while downstream industries receive fewer deliveries. Ex-factory prices of calcium carbide in various regions: In Wuhai and Ordos areas of Inner Mongolia, the price is 2,450–2,550 yuan per ton ； 2,450–2,500 yuan/ton in the Shizuishan area of Ningxia ； Zhongwei region: 2,550–2,600 yuan/ton ； 2,400–2,450 yuan/ton in the Shaanxi region ； In Gansu region, it is 2,550–2,600 yuan per ton. III. Industry updates: PVC manufacturers using the electrochemical calcium carbide process raise their ex-factory prices. Type 5 ordinary calcium carbide material; the mainstream ex-factory price offered by enterprises in Inner Mongolia is 6250–6350 yuan per ton ； The mainstream acceptance price in Shandong region is 6,530–6,580 yuan per ton at the factory exit ； The mainstream ex-factory price in Hebei region is 6,300–6,450 yuan per ton on credit ； In the Shanxi region, the standard ex-factory price is 6,200–6,300 yuan per ton, payable upon acceptance. Domestic PVC manufacturers using the ethylene process are seeing overall steady growth. Currently, in the North China region, the price at the factory for products from Qilu Petrochemical, Tianjin Dagu, and LG Dagu is 5,900–6,000 yuan per ton. In the East China region, the delivery price is 6,250–6,350 yuan per ton. As for Formosa Plastics in Taiwan, its quote for September is 850 US dollars per ton CFR the main ports in China. IV. Market Trends: Quotations for the domestic mainstream PVC market. 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 material SG-5: 50,000–6,570, +206; 58,000–6,680, +50; 63,000–6,400, +50; 59,500–6,000. Ethylene-based material: 10,000; 69,500–70,500, +50; 69,500–71,000; 67,500–6,950, +50. For ordinary Type 5 calcium carbide material in East China, the prevailing price is 6,400–6,550 yuan/ton; Yusheng’s price is 6,370 yuan/ton, Dongxing’s Type 5 material costs 6,370 yuan/ton, Tianhu’s price is 6,390 yuan/ton, Yili’s Type 5 material costs 6,480 yuan/ton, Tianhu’s Type 3 material costs 6,570 yuan/ton, Jinyu Yuan’s Type 5 material costs 6,370 yuan/ton, Tianchen Tianneng’s Type 5 material costs 6,470 yuan/ton, and Zhongtai Beiyuan’s price is 6,500 yuan/ton ； Ethylene material is available at 6,750–6,900 yuan per ton; the final price can be negotiated. In the North China PVC market, at Qilu Chemical Industry City, the price of Qilu S700 is 6,950 yuan per ton, while the price of S1000 is 6,700 yuan per ton, with pickup available on-site. Calcium carbide is delivered at 6,210–6,230 yuan per ton. Delivered in the Linyi area at around 6,380 yuan per ton. In Hebei, it can be picked up at around 6,300 yuan per ton. Pickup from warehouse in Tianjin area at around 6,290 yuan per ton. The mainstream price for Type 5 calcium carbide process PVC in the South China market is 6,600–6,700 yuan per ton ； Junzheng’s old factory charges 6,700 yuan per ton; Yili, Junzheng’s new factory, and Zhongtai charge 6,680 yuan per ton; Dongxing and Dongfang Hope charge 6,670 yuan per ton; Yili Nangang charges 6,600 yuan per ton ； Tianye Tianchen Tianneng: 6,720 yuan per ton ； Dagu 1000/800/700 is priced at 6,900 yuan per ton, while Dagu 1300 is priced at 7,000 yuan per ton. V. Transaction Review: Today, the PVC market on the Plastics Exchange showed an overall upward trend, with the price of Type 5 PVC in the South China region rising particularly sharply. The supply in the South China, East China, and North China regions is limited, and the shortage of goods in the market remains unchanged. Trading volume on the market has increased. By the close, the settlement price for September 5th in South China was 6,673 yuan per ton (the same unit is used thereafter), an increase of 223 yuan ； On October 5, the settlement price in South China was 6,683 yuan, an increase of 183 yuan; the settlement price in East China was 6,433 yuan, an increase of 3 yuan. Fundamentals: Today, PVC market prices continued to rise, with the futures market seeing a slight increase as well. The supply in the upstream calcium carbide market remains insufficient; the tight supply-demand situation has not been effectively alleviated, and calcium carbide prices remain high. Raw material costs continue to provide strong support for the PVC market. Recently, social inventory of PVC has remained at low levels for the year, resulting in relatively tight market supply. However, given the downstream market’s willingness to pay high prices, the upward trend in the PVC market is expected to slow down tomorrow. VI. Future Outlook: The PVC market continued to show an upward trend today. Although recent low levels of international oil prices have had a negative impact on the PVC market, a combination of favorable factors such as tight supply in the market, rising environmental regulations, and increased shipping costs has driven the PVC market to rise more than expected. In the short term, positive factors in the market remain stronger than negative ones. It is expected that the strong trend in the PVC market will continue.