PVC: It is difficult for this year to stabilize before falling next year
In 2005, domestic PVC production capacity increased significantly, and the market price fell steadily and then fell sharply. Industry insiders expect that the situation will not be optimistic next year.
By November this year, domestic PVC production reached 5.878 million tons, a year-on-year increase of 27.4%. It is estimated that the annual PVC production will be close to 6.5 million tons, an increase of about 29%. Increased production led to oversupply, while prices dropped significantly. In the first 4 months, domestic PVC prices did not change much, but in May the domestic PVC market prices fell sharply and became the lowest price month this year. The price of calcium carbide method polyvinyl chloride at the end of May in South China was 6,000 to 6,300 yuan. The ethylene method is 6200 to 6500 yuan. Prices began to rise in June, followed by a slight downward trend in July and then again in August, but the follow-up market has been relatively sluggish, and prices are in decline. By the end of December, the calcium carbide process in East China South China was between 6,200 and 6,300 yuan, and the ethylene process was between 6,250 and 6,500 yuan, and it continued to be in a downward trend.
Looking forward to 2006, the overall situation of the domestic PVC market is not optimistic, and it is difficult to pick up. The main influencing factors are:
The continuous expansion of production capacity This year, due to the sharp increase in domestic PVC production capacity, the output soared, causing the domestic PVC market to oversupply, and the price has shrunk dramatically. According to statistics, at the end of 2005, the domestic PVC production capacity reached 9.72 million tons, and in 2006 it will continue to increase 3.75 million tons to 13.47 million tons, an increase of about 38.6%. The increase in production capacity is directly reflected in the price drop, and the product competition is intensified. Therefore, one of the key factors affecting the PVC market in 2006 and 2006 is the increase in output. Moreover, the expansion project at the end of this year was basically completed in 2006, and its negative impact is unquestionable.
The market pressure of the ethylene law has increased although the price of crude oil in the international market has been ups and downs, but the overall level is still high. In 2006, the international oil market can be said to be mixed. Experts believe that from the perspective of supply, due to the fact that global crude oil production capacity and production are unlikely to increase significantly, and the 'bottleneck' problem of insufficient refining capacity cannot be solved for a time, oil price reduction space is extremely limited. The relevant international agencies therefore expect crude oil prices to remain at high levels in 2006 and will remain at around US$65 per barrel. The ethylene process is squeezed by both cost and calcium carbide, making it difficult.
Impact of Macro-control This year, due to the national macro-control measures, the real estate industry has been greatly affected. As a result, demand for PVC in the building materials industry has shrunk. This will continue to have a negative impact on the PVC market in 2006. Circular economy, environmental protection policies and energy issues continue to be factors that affect the development of the PVC industry. At the end of the year, the National Development and Reform Commission is studying the governance opinions for the calcium carbide industry and the calcium carbide process polyvinyl chloride industry, and relevant policies will be introduced in the near future. As the calcium carbide process expands the pace of polyvinyl chloride gradually, the domestic market, calcium carbide method, ethylene method spread may further widen.
The import and export market affected the total domestic imports of PVC from January to October 2005 to 1,447,800 tons, a decrease of 19% year-on-year; exports of PVC were 75,900 tons, an increase of 121% year-on-year. Especially in September and October this year, the domestic PVC exports have increased significantly. This year's export volume will exceed 100,000 tons, and the import and export market will be one of the factors that will ease and affect the domestic PVC market in the future, and it is also the focus of attention in the industry. one.
Downstream demand factors The domestic PVC downstream demand in 2005 maintained a certain increase. From January to October 2005, the cumulative production of domestic pipes was 1.528 million tons, a year-on-year increase of 16.75; the profile was 1.916 million tons, an increase of 11.6% year-on-year; and the film was 3.598 million tons, a year-on-year increase of 15%. The growth rate of the downstream industry is still about 15%, but due to various factors, the downstream industry is constrained by a large amount, and therefore far lower than the growth rate of PVC in the upper reaches. As the country's macro-control will still have a significant impact on 2006, downstream demand is still difficult to keep up with the pace of the upper reaches, which also led to the PVC market in 2006 will still be a prominent year of supply and demand contradictions.
The dominant factor affecting the domestic PVC market in 2006 will be the supply and demand relationship. Due to the imbalance between supply and demand, the domestic PVC market will enter the stage of reshuffling and industrial adjustment, and the market price will remain low for a period of time. PVC market Will enter the industry adjustment period.