Business trends
Analysis of domestic PVC market trend in 2023
In 2023, the overall performance of China's PVC market was relatively low, and the lowest price appeared in mid-June, and the market fluctuation range was basically 900-985 yuan/ton. The domestic PVC market began to pick up on the 8th of this month, but the average price of PVC by ethylene method and calcium carbide method still dropped by 6.7% and 5.9% respectively compared with the beginning of this year. Generally speaking, the main factors affecting the domestic PVC market trend include:
1. The capacity of new devices is released one after another. This year, the domestic production capacity of PVC increased by 910,000 tons, and the trial run was basically completed in the first half of the year. The supply of PVC increased steadily and the market supply pressure increased.
2. In terms of demand, the performance of the real estate market has been relatively weak since this year. Although the state has successively issued various policies to promote the stable development of real estate, the spot market has risen in a short time, but the overall demand for downstream plastic products is weak. Domestic downstream processing enterprises are under-started, which leads to limited increase in domestic PVC demand.
3. The export market is relatively active. In 2023, the domestic PVC foreign trade market was more active. The export performance of PVC was better in the first quarter, and it dropped significantly in the second quarter. In the third quarter, PVC installations in the United States and Taiwan Province, China were overhauled one after another, and the supply in the international market was tight. At the same time, India began to increase its procurement and stocking due to the end of the rainy season, which led to the increase of China's PVC export quotation and the increase of export orders. From January to November 2023, China exported 2.101 million tons of pure PVC powder, up 14.2% year-on-year. The export market plays a certain role in improving the relationship between domestic supply and demand.
4. The prices of raw materials such as calcium carbide and ethylene dropped significantly. Taking the calcium carbide market in the northwest of the main producing area as an example, the current market has slightly recovered to 3100-3220 yuan/ton, but it is still 750-780 yuan/ton lower than the peak of 3850-4000 yuan/ton at the beginning of the year. In terms of ethylene raw materials, the current average CFR of ethylene in Northeast Asia is 865 USD/ton, which is 5 USD/ton lower than that at the beginning of this year.
5. The impact of the futures market on the spot market has increased. In 2023, the PVC futures market fluctuated greatly, which had a great impact on the spot market.