In 2016, the domestic commodity market was fierce and the game was fierce, and the traders' nerves were frequently challenged. The PVC market trend was also a double-fired day. The market trend was flat in the first half of the year, in order to maintain the cost-based operation, but since June, domestic futures The market has set off a trend of rising prices, and the more the more powerful, the new price. At the same time, stimulated by the policy and demand dividends, the PVC market climbed higher until it broke through the 8,000 yuan/ton mark, and then stood at a new high in five years! But from the end of November, the market was weak and the price rose. The momentum stopped and the price bubble was gradually squeezed. But overall, the fierce rise in PVC prices during the year has made PP and PE in the general plastics industry discouraged, making PVC a star in the general plastics world.
Domestic calcium carbide method PVC price chart
Policy dividends ushered in price increases
The national “three to one, one reduction and one supplement†policy measures have achieved initial results. After the industry adjustment in recent years, the overall overcapacity situation has eased. A large number of backward production capacity has been parked for a long time, and supply and demand have basically reached a relatively stable level. At the end of 2015, the total production capacity of the PVC industry was 23.48 million tons, a decrease of 410,000 tons compared with 2014. At the same time, benefiting from macro-control measures such as “de-capacityâ€, the price of black coke, such as coking coal and coke, has been raised, which has injected new impetus into the entire chemical industry and led the market for bulk raw materials to gradually rise.
The series of temporary policy measures continue to stimulate business nerves and create opportunities for the phased increase in PVC prices. This year, China's environmental protection field has set off a trend of supervision. Since July, the first batch of central environmental protection inspectors have been fully launched in 2016, and environmental protection has been carried out in Inner Mongolia, Heilongjiang, Jiangsu, Jiangxi, Henan, Guangxi, Yunnan and Ningxia. Inspector work, the second batch of environmental protection inspections was launched in November. Relevant manufacturers of PVC industry chain are affected by this, adopting series of measures to reduce production and limit production! The impact is mainly reflected in product transportation, calcium carbide production and supply. With the development of inspection work, the supply of calcium carbide is scarce, and PVC manufacturers reduce production. To alleviate the shortage of calcium carbide supply, the PVC ex-factory price has also increased. Especially since September 21, since the implementation of the "Regulations on the Management of Over-traveled Transportation Vehicles", the problem of tight transportation capacity in the PVC market continued to ferment, which eventually led to the continued tight supply of spot goods in major markets, and merchants were reluctant to sell goods and pushed up prices.
Demand volume brings substantial support
The volume of the demand side brings substantial support to the market. From the downstream demand of PVC, profiles, pipes, doors and windows account for more than 50% of downstream consumption, and the real estate market demand seriously affects the start-up and quotation of upstream PVC manufacturers. According to the National Bureau of Statistics, from January to February this year, the year-on-year growth rate of real estate investment jumped rapidly from 2.5% in December 2015 to 4.8%; in March, it accelerated to 8.2%. From January to November, the new housing area of ​​the country was 151.303 million square meters, an increase of 7.6% year-on-year; the hot market real estate market will undoubtedly drive the downstream demand of PVC. From the historical market point of view, the impact of the real estate market on PVC products will lag behind for a few months, and in this year's "Golden September and Silver 10" period, the PVC parade has improved significantly, and the PVC market price trend has gradually increased.
In addition, under the policy of the “One Belt, One Road†policy, the “going out†strategy of enterprises has successfully solved the domestic excess capacity and effectively alleviated the pressure of domestic supply and demand. It is understood that in the first half of the year, the domestic PVC giant Xinjiang Tianye's PVC exports amounted to 210,000 tons, far exceeding the same period of last year; and from the overall export market, according to China Customs statistics, January-November 2016, PVC pure powder The cumulative export was 1.0133 million tons, up 43.10% year-on-year. The export market continued to increase, effectively reducing the pressure on supply and demand in the domestic PVC market. From the perspective of major exporters, China's PVC exports are still dominated by India, followed by Southeast Asia. Malaysia, Thailand, Vietnam, etc.
Future market demand is still expected
At present, the PVC industry has basically entered a mature stage and entered the era of high cost support. In the past few years, under the profit-driven, PVC production and supply entities have rapidly increased production capacity, resulting in continued overcapacity in the industry. In the context of overall demand close to saturation, PVC production The supply contradiction of enterprises is prominent. With the implementation of the supply-side structural reform, the industry's “three to one, one reduction and one supplement†continued to advance, and backward and idle production capacity gradually cleared. The supply contradiction of PVC production mains was basically solved, and the demand side's influence became more and more important. However, in the context of the continued tightening of property policies, this major consumer sector is unlikely to continue to contribute to the consumption of PVC, which is basically in a stable situation; and with the construction of “Urban Underground Integrated Pipe Gallery†put on the agenda, PVC in this field Demand is expected to break through.
As early as 2014, the General Office of the State Council issued the "Guiding Opinions on Strengthening the Management of Urban Underground Pipeline Construction". It has been two years since the census work was basically completed; on June 29, 2016, the Ministry of Finance, the Ministry of Housing and Urban-Rural Development, and the Ministry of Urban and Rural Construction Jointly issued the "Notice on the Application of PPP Promotion Projects in the Municipal Field", and the smooth cooperation of all parties to the project docking channel, to promote more projects to achieve financing and implementation. This series of policy measures also means that 2017 will be the implementation period of the implementation of the “Urban Underground Integrated Pipe Galleryâ€. This may open a new situation of PVC consumption. In the context of the sluggish consumption of PVC industry and the increase of inventory, it will form a strong support for the price of PVC bottom, and still have the opportunity to become a star in the general plastics industry again.
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