Polyvinyl chloride (PVC): a dark horse on the plastics market

China is a country with less gas, more coal and less oil. At present, 80% of PVC production in China is dominated by calcium carbide. The price trend of calcium carbide seriously affects the domestic PVC price trend. Beginning in the middle and late July, the central environmental protection inspection team entered Inner Mongolia, Ningxia and other places. The consumption of calcium carbide production was huge and the environmental pollution was serious, which became the key monitoring object of the environmental inspection team. Under the pressure of environmental protection, calcium carbide and PVC production enterprises in Inner Mongolia were forced to close production, resulting in a shortage of calcium carbide supply in the short term, and the quotation continued to increase. Individual production enterprises reduced the starting load to maintain production, affecting domestic PVC supply and demand, resulting in manufacturers' quotations rising. Up to now, the price of calcium carbide has remained high, supporting the price of PVC, and it is difficult to have a big decline in the short term. Coupled with the steady rise in the price of coal and blue carbon, PVC will continue to be dominated by the latter.

Recently, the Ministry of Transport and other five ministries and commissions issued the "Regulations on the Governance of Overloading and Overloading of Freight Vehicles". From September 21 to August 2017, the transportation vehicles shall not exceed 49 tons of total mass, and the height limit is 4 Below the meter. The freight rate increased by 30 yuan / ton ~ 50 yuan / ton. At present, the policy has just been implemented, the market is still waiting to wait, some of the motor transport is out of service, and restrictions on downstream demand are formed, and the market arrival is reduced. Some manufacturers said that compared with the previous period, the amount of goods is reduced, the freight is higher, and the increased portion can only be added to the PVC offer, resulting in the continuous rise of PVC prices in the short term.

Serious social inventory consumption, low overall inventory of manufacturers

In the early stage, affected by environmental protection supervision, some PVC manufacturers that supplied their own calcium carbide plants were forced to limit production or shut down the calcium carbide workshop, resulting in a decline in the operating rate in the short term. The supply of calcium carbide was tight, the shipments of manufacturers decreased, and the overall social inventory decreased. At the beginning of September, Hangzhou G20 summit was restricted, trains were stopped, Hangzhou market transactions were basically stagnant, and transactions in South China were normal, traders frequently replenished stocks, and speculation was serious. At the end of the summit, Hangzhou downstream product manufacturers resumed construction, and short-term replenishment peaks appeared in the East China market, resulting in further shortage of supply. After a period of production, South China and East China manufacturers have basically exhausted their inventory in the early period. In addition, the recent PVC gains have not decreased. Some traders and product manufacturers have purchased a large amount of goods, or used it for their own use, or they are prepared to sell at a later price. Profits further pushed up PVC prices.

In summary, PVC calcium carbide will continue to maintain low production in the short term, and the price will continue to remain firm, supporting the spot price of PVC. The transportation market is still waiting to see, and it is expected that the PVC cost will continue to be affected in the later period. The National Day is approaching, and some downstream manufacturers will stock up in advance to prepare for the start of the holiday. In the short term, PVC will continue to maintain the upswing.