Introduction
With the end of the Spring Festival holiday, all links in the market have resumed, Pvc Resin manufacturers and midstream traders have basically resumed normal sales, most large-scale downstream products enterprises have resumed production, and some will start work after February 5. During the Spring Festival, due to the basic stagnation of traffic and investment, the increase of factory inventory and social inventory of production enterprises was relatively obvious, and the market returned to the basic logic after the festival due to the partial digestion of many macroeconomic factors in the early stage.
Price: after the holiday, the price fluctuated and the downward focus fell
In 2023, the domestic macro environment has improved compared with the previous period, and the market generally has a strong expectation for 2023. Supported by the strong macro expectation, the futures and spot prices of the PVC market have continued to rise before the Spring Festival. The average daily price of East China SG-5 on the last trading day before the festival is 6582 yuan/ton, but most downstream product enterprises have holidays, so the spot transaction has weakened. After the Spring Festival, the macro-positive factors were gradually digested, the accumulation of social inventory increased, the basic contradiction between PVC supply and demand was highlighted, and the spot price was under pressure. As of February 3, the average price of East China SG-5 was 6195 yuan/ton, down 387 yuan/ton from before the festival, down 5.88%.
Supply: The starting load rate of the PVC industry will increase slightly after the holiday
In terms of stock: before the Spring Festival, the operating load rate of the PVC industry has gradually increased to a relatively high level since the fourth quarter of 2022. On the one hand, during the Spring Festival, most of the PVC devices remain in normal operation, and there are few maintenance devices; On the other hand, some PVC production enterprises consider safety production, reduce liquid chlorine take-out and other factors, and maintain a relatively high operating load rate of PVC during the Spring Festival.
In terms of increment: Xinfa PVC Resin 200000 tons plant was officially put into operation in January, and Dezhou Shihua 100000 tons PVC powder plant was officially put into operation in February.
Raw materials and costs: the price of calcium carbide fell after the holiday, but the loss of PVC single product remained high
Since the Spring Festival holiday, the price center of calcium carbide market has continued to decline. The export price of calcium carbide enterprises to traders has been reduced by about 200 yuan/ton, and the purchase price of calcium carbide for PVC enterprises has been reduced by about 100 yuan/ton. During the Spring Festival holiday, the construction of calcium carbide gradually stabilized and the supply increased, but the transportation condition was poor, the downstream construction also declined slightly, and the shipment of calcium carbide enterprises was not smooth, so the factory price was reduced to promote the shipment. After the Spring Festival holiday, transportation gradually recovered, but the contradiction between supply and demand remained unchanged. The number of cars waiting to be unloaded at the downstream of calcium carbide continued to increase, and unloading began to be difficult. The purchase price of calcium carbide for PVC enterprises was partially reduced. Although the price of calcium carbide has declined before and after the Spring Festival, the price of PVC has also dropped significantly after the Spring Festival. At present, the cost pressure of calcium carbide PVC is still high and the loss is still large.
Demand: downstream work will resume after the holiday, but it will take time to start and improve
The overall order situation of downstream product enterprises before the Spring Festival is not ideal. In addition, the Spring Festival in 2023 is early, and a small number of downstream enterprises will take early holidays after the New Year's Day. In addition, the spot price of PVC period continued to rise driven by the macro stronger expectations. Due to the high price of PVC market before the Spring Festival, the intention of some downstream product enterprises to prepare goods before the festival was suppressed, most of the small and medium-sized enterprises had low raw material inventory, and most of the large-scale enterprises had a certain amount of raw material inventory, but the overall stock volume was relatively low.
After the Spring Festival, PVC downstream products enterprises are still in the recovery stage. Most large enterprises will resume production on January 31, and a few are scheduled to resume work around February 6. Due to the low stock of raw materials in some enterprises before the Spring Festival, the spot price of PVC fell after the Spring Festival, and the enthusiasm of downstream procurement of raw materials increased. According to the survey and statistics, the downstream product enterprises basically resumed work after the Lantern Festival, but it takes time to start and improve. At present, some large pipe and profile enterprises have started to recover to about 30%, and the floor enterprises have started to work slightly lower. The downstream order situation needs to be paid attention to in the later stage.
Inventory: PVC inventory increased significantly after the holiday
The increase in factory inventory of manufacturing enterprises is mainly due to the fact that, on the one hand, due to the weakening of demand during the Spring Festival, the transactions in the market have basically entered a standstill, and some manufacturing enterprises have reduced their shipments due to the lack of transportation resources, and the factory inventory has accumulated significantly; On the other hand, although the shipments of enterprises that mainly rely on rail transport and rail-sea intermodal transport during the Spring Festival are not affected, some of them have accumulated to some extent due to the limited pre-sale orders before the festival. The increase in social inventory is mainly due to the fact that before the Spring Festival holiday, the production enterprises actively transferred the factory inventory to the East China/South China warehouse, and the downstream holiday, so the East China/South China warehouse is mainly based on the arrival of goods, with fewer outbound goods. After the holiday, most East China warehouses said that the full stock was stopped, and the source of goods was diverted to some non-mainstream warehouses.
In general, the overall accumulation range of factory inventory and social inventory of manufacturing enterprises has little change compared with that in 2022, but in absolute terms, the inventory level in 2023 is significantly higher than that in 2022. According to the statistical data of Zhuochuang Information, as of the latest issue, the factory inventory of production enterprises after the Spring Festival in 2023 was 598600 tons, which was 3201000 tons higher than that after the Spring Festival in 2022. After the Spring Festival in 2023, the sample warehouse of East China/South China was 447500 tons, which was 116100 tons higher than that after the Spring Festival in 2022.
Summary of market changes after the holiday: After the Spring Festival holiday, the basic level of PVC powder has weakened significantly, and the supply has gradually increased, but the demand performance is weak, and the demand recovery takes time, so the social inventory after the holiday has increased significantly, and the absolute value is significantly higher than that of the same period last year. Under the weak basic performance, the spot market has fallen under pressure. The market trend of PVC powder in the later stage still needs to pay attention to the macro and fundamental changes.
In the later period, the PVC market focused on the key post-holiday market changes. Summary: After the Spring Festival holiday, the basic level of PVC powder was significantly weakened, and the supply gradually increased, but the demand performance was weak, and the demand recovery took time, so the social inventory after the holiday increased significantly, and the absolute value was significantly higher than that of the same period last year. Under the weak basic performance, the spot market was under pressure. The market trend of PVC powder in the later stage still needs to pay attention to the macro and fundamental changes.
In the later period, the PVC market focused on the key post-holiday market changes. Summary: After the Spring Festival holiday, the basic level of PVC powder was significantly weakened, and the supply gradually increased, but the demand performance was weak, and the demand recovery took time, so the social inventory after the holiday increased significantly, and the absolute value was significantly higher than that of the same period last year. Under the weak basic performance, the spot market was under pressure. The market trend of PVC powder in the later stage still needs to pay attention to the macro and fundamental changes.
Focus of PVC market in later stage
At present, the PVC market is intertwined between long and short, the fundamental and macro aspects are still in the game stage, and the short-term PVC market price change range may be relatively large. For PVC fundamentals, the short-term changes in the supply side are expected to be relatively limited, focusing on the process of demand recovery and the trend of inventory changes. In the macro aspect, further attention should be paid to the impact of the follow-up domestic and foreign macro news and policies on the market mentality, as well as the impact of the actual implementation of early policies on the actual demand for PVC production.
