When policy risks hit, market sentiment deteriorated as a whole, and chemical products all declined to varying degrees. Among them, the PVC callback rate was the most obvious.
Supply is not really relaxed
The National Development and Reform Commission has deployed a number of policies and guidelines to increase coal supply, and the resource supply and demand gap has been eased. However, electricity will be given priority to residential electricity.
Calcium Carbide and PVC are high energy-consuming industries. The situation of electricity and production restrictions is still not optimistic, and the operating rate is difficult to achieve. Significantly improved.
There is no sign of relaxation in the dual energy consumption control policy, so although the supply margin has improved, the start of calcium carbide and PVC will still be restricted. Recently, the weak operation of PVC will affect the price of calcium carbide, but the market is expected to stabilize the price while seeking a balance, and the callback rate of calcium carbide is likely to be less than that of PVC.
poor demand performance
Demand has performed poorly in the process of price decline. Downstream factories are buying up and not buying down. The wait-and-see sentiment is strong. Most of them only maintain just-needed purchases. The superimposed cost weakness will temporarily suppress the rebound in PVC prices. The sharp decline in PVC has eased the downstream pressure. Factory profits will certainly pick up, and start-up expectations will rise. However, overall demand is more elastic than supply, and it has been relatively stable and will not become a major driving force.
Go to the library smoothly
The market panic has not completely dissipated, spot prices are in the stage of falling, and all parties in the industry chain have no willingness to replenish the inventory. The upper and midstream are willing to go to the inventory. The downstream procurement is mainly based on rigid demand, but the absolute level of overall inventory is at a low level over the same period.
When the price of PVC fell, the intention to receive goods was weak, and it continued to digest its own raw material inventory, while the inventory of finished products was also slightly reduced. There is no pressure on the overall inventory of the industry chain for the time being, and this round of price decline has little to do with fundamentals.
From the perspective of profit analysis, under the dual drive of coal and PVC prices, calcium carbide will also open a downward channel. The price of caustic soda will also fall, and the break-even point of chlor-alkali will drop. Under multiple factors, the short-term PVC pressure is weak and oscillating. Until the profit of the industrial chain is balanced again.
Comprehensive analysis found that the rate of increase in coal prices on the disk has basically been retreated. Under the influence of policies, short-term PVC prices will still be under pressure, but there is little room for subsequent declines. Under the guidance of policies, the market will return to rationality, price trends will be dominated by fundamentals again, the weak balance of supply and demand will continue in the fourth quarter, and prices will slowly bottom out during the destocking process.
We have done chemical products for over 30years. Our main products include PVC Resin, CPE, TIO2,Pe Wax, Paraffin Wax, Stabilizer ETC.
