The price of PVC fell to a three-year low, what is the future of the market?

  As the saying goes, extremes must be reversed. In the past three years, the PVC market has experienced a process from weak to strong and then from prosperity to decline. At the beginning of 2020, the global new crown epidemic broke out, and the PVC market fell sharply. On April 2, the Shandong market S-1000 fell to a historical low of 5180 yuan/ton. With the easing of the domestic epidemic situation, the operating rate of downstream enterprises increased, superimposed on the reduction of foreign supply, and the increase of domestic exports, the price of PVC rose sharply after bottoming out. fall back. In 2022, the PVC market will continue to fall after a slight rebound. At the end of October, the price of S-1000 in the Shandong market fell to 5,950 yuan/ton, falling below the integer mark of 6,000 yuan. During this period, the PVC import market is basically in line with the domestic market. Future PVC market trend outlook
      01 | The economic situation at home and abroad is worrying, and the short-term negative atmosphere continues

In order to curb inflation, the Federal Reserve and the European Central Bank successively raised interest rates by 25 basis points in early May. The central bank raised interest rates for the seventh time in a row, taking its policy rate to a near 15-year high of 3.25%. In addition, the U.S. regional banking crisis continued and once spread to Europe; the political deadlock surrounding the U.S. debt ceiling has not yet been resolved, and the U.S. government’s risk of default has increased; the possibility that the Federal Reserve and the European Central Bank will continue to raise interest rates in June has intensified the market Fears of a global recession.

In terms of the domestic economy, the industrial added value in April increased by 5.6% year-on-year, which was far lower than the market's expected growth rate of 10.9%; retail sales increased by 18.4%, which was also lower than the expected 21.9%. In May, the Manufacturing Purchasing Managers Index (PMI) was 48.8%, a decrease of 0.4 percentage points from April, which was lower than the critical point for two consecutive months, and the level of manufacturing prosperity continued to fall. The above data show that after the strong rebound of the Chinese economy in the first quarter of this year, the recovery momentum in the second quarter began to slow down, indicating that the Chinese economy still faces many pressures in the post-epidemic era, and the momentum for continued growth is insufficient.

      02 | The economic situation at home and abroad is worrying

From June to July this year, Suzhou Huasu, Ordos, Shanxi Yushe, Shaanxi Jintai, Inner Mongolia Yihua, Shanghai Chlor-Alkali, Shandong Lutai, Shanxi Ruiheng, Zhongtai Chemical Fukang Factory, Taiwan Formosa Plastics Linyuan Factory, Heilongjiang Hao Inner Mongolia Huahua, China Salt and other sets of equipment are scheduled to be overhauled, coupled with the continuous loss of calcium carbide method equipment, companies have increased production restrictions and increased prices, and supply has decreased significantly. Social inventory will continue to decline, but it is still at a high level year-on-year. As of June 1, the domestic PVC social inventory was 468,300 tons, an increase of 39.48% year-on-year, of which 374,400 tons were in East China, an increase of 36.77% year-on-year; 93,900 tons in South China, an increase of 51.45% year-on-year. The statistical comparison of PVC social inventory in the past three years is shown in Figure 2.