December 20, 2016: The market could not stop the downward trend; PVC prices continued to fall

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December 20, 2016: The market could not stop the downward trend; PVC prices continued to fall. I. Market overview: On December 19, U.S. WTI crude oil February futures rose by $0.22； February futures for Brent crude fell by $0.29, closing at $54.92 per barrel. Today, the domestic PVC market continued to decline, with a generally pessimistic market sentiment. At present, the PVC supply in various regions remains stable, but demand from downstream industries is low. Additionally, the worst foggy weather this winter in China has led to certain restrictions on the operations of downstream processing enterprises in Hebei and Shandong provinces. The outlook for PVC in the future is not optimistic. It is expected that the PVC market will continue to show a downward trend tomorrow as well. II. Upstream raw materials: On December 19, prices of ethylene in Asia remained stable, with CFR Northeast Asia at 1144.5–1146.5 USD/ton, and CFR Southeast Asia at 994.5–996.5 USD/ton. The ex-factory prices of calcium carbide enterprises vary; the differences are significant depending on the downstream markets and regions to which it is sold. It remains to be seen how these prices will change in the Shaanxi region as production resumes there. Local calcium carbide ex-factory prices: 2,600–2,650 yuan/ton in Wuhai and Ordos areas of Inner Mongolia ； 2,600–2,650 yuan/ton in the Shizuishan area of Ningxia ； Zhongwei region: 2,650–2,700 yuan/ton ； 2,600–2,650 yuan/ton in the Shaanxi region ； In Gansu region, it is 2,600–2,800 yuan per ton. III. Industry updates: PVC manufacturers using the electric arc furnace method are holding prices when selling their products. Type 5 ordinary calcium carbide material: the mainstream price at manufacturers in the surrounding areas of Inner Mongolia is 6,400–6,500 yuan per ton ； The mainstream acceptance price in Shandong region is 6,600–6,700 yuan per ton at the factory exit ； The mainstream ex-plant price in Hebei region is around 6,600 yuan per ton on credit ； In the Shanxi region, the standard ex-plant price is 6,900 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 price at the factory for products from Qilu Petrochemical, Tianjin Dagu, and LG Dagu is 7,800–7,900 yuan per ton. In the East China region, the delivery price is 7,900–8,000 yuan per ton. For Formosa Plastics in Taiwan, the quote for December is 970 US dollars per ton CFR the main port in China. IV. Market Trends: Domestic PVC market price quotes. Unit: yuan/ton. Product type, East China price change, South China price change, North China price change, Northwest China price change. Calcium carbide-based material: SG-56 at 30,643 at 30,063 at 6480 at 300; 6230 at 6300 at 170; 6100 at 6150 at 100. Ethylene-based material: 10,000, 7,500 at 7,600 at 200; 7,450 at 7,550 at 200; 7,250 at 7,350 at 200. The average price in the East China PVC market is around 6,300–6,820 yuan/ton. Actual transactions are based on negotiations. The reference prices are as follows: for the Zhongtai Model 5 in Hangzhou, the price is 6,550–6,600 yuan per ton, while for the Beiyuan Model 5, it is 6,350–6,400 yuan per ton. For the calcium carbide method, Type 5 is commonly priced at around 6,300–6,400 yuan per ton in the Jiangsu region; in Shanghai, Tianchen Type 5 costs 6,750 yuan per ton, while Tianye Type 3 costs 6,950 yuan per ton. Ethylene material: 7,800–7,900 yuan per ton. In the North China PVC market, at Qilu Chemical Industry City, the price of Qilu S700 is 7,770 yuan per ton, while the price of S1000 is 7,420 yuan per ton, with delivery available upon pickup. Calcium carbide is delivered at around 6,300-6,400 yuan per ton. In the Linyi area, it costs around 6,500 yuan per ton for delivery. Pickup available in Hebei for around 6,400. Pickup from warehouse in Tianjin area at around 6,430 yuan per ton. The mainstream price for Type 5 calcium carbide process PVC in the South China market is 6,450–6,550 yuan per ton ； Tianeng and Tianchen: 6,600 yuan per ton; Yili and Junzheng’s old factory: 6,550 yuan per ton; Junzheng’s new factory: 6,480 yuan per ton; Dongfang Hope and Tianhu: 6,500 yuan per ton; Xinfa, Jilantai, Dongxing, Shenghua, Jinhua, Inner Mongolia Yihua, Yanhu, and Sanlian: 6,450 yuan per ton; Tianhu: 6,450 yuan per ton ； Dagu 1000/700/800 is priced at 7,550 yuan per ton, Dagu 1300 is at 7,800 yuan per ton, and Hanwha HG-1000F is at 8,100 yuan per ton. V. Transaction Review: PVC prices on the Plastics Exchange were volatile and showed consolidation today ； The PVC price in the futures market continues to decline, with a strong bearish sentiment among industry players; prices in various trading zones ended the session on a downward note ； By the close, the South China settlement price for December was 6,700 yuan per ton (the same unit is used below), a decrease of 300 yuan ； The settlement price in East China is 6,780 yuan, a decrease of 100 yuan ； The settlement price in North China is 6,500 yuan, a decrease of 200 yuan ； The settlement price in the northwest is 7,411 yuan, an increase of 911 yuan ； The settlement price for the ethylene method is 7,650 yuan, a decrease of 150 yuan. Fundamentally: The domestic PVC market continued to decline today, with a relatively pessimistic market sentiment. At present, the PVC supply in various regions remains stable, but demand from downstream industries is low. Additionally, the worst foggy weather this winter in China has led to certain restrictions on the operations of downstream processing enterprises in Hebei and Shandong provinces. The outlook for PVC in the future is not optimistic. It is expected that the PVC market will continue to show a downward trend tomorrow as well. VI. Future Outlook: The domestic PVC market is in a state of chaos, with lower bid prices appearing in various distribution centers; in some areas, prices even change twice a day. Sellers are quite pessimistic about the future outlook. Currently, the overall operational rate in the main production areas in the northwest is high, with an ample supply of goods in the market. As a result, end-users are less inclined to make purchases, the trading atmosphere is sluggish, and the downward trend in prices shows no sign of stopping. (Excerpted from China Chemical Products Network)