Introduction
In the third quarter of 2024, the overall price of
PVC Paste Resin in China showed a trend of first stabilizing and then continuously declining. As the end of the quarter approached, the price rebounded slightly. On the supply side, some PVC paste
Resin production enterprises had concentrated equipment maintenance in the third quarter, and the industry's operating load rate declined significantly. However, on the demand side, the traditional off-season from July to August had limited improvement in demand in September, resulting in overall weakness. In the fourth quarter, there is still pressure on the supply side of the industry, and the improvement in demand needs to be observed. It is expected that the price center of gravity may still shift downwards.
In the third quarter, the domestic PVC paste resin prices first stabilized and then declined, with a slight rebound at the end of the quarter, and the price center shifted downwards compared to the second quarter. As of September 27th, the mainstream transaction price of PVC paste resin bulk market in East China was between 7150-7850 yuan/ton, with a quarterly average price of 7771 yuan/ton, a decrease of 0.55% from the second quarter and 4.87% from the same period last year. The high point of the average price of PVC paste resin bulk market in East China in the third quarter appeared at 8125 yuan/ton in early July, and the low point of the average price was 7350 yuan/ton in late September; The mainstream transaction price of PVC paste resin glove material in the North China market is between 7500-7800 yuan/ton, with a quarterly average price of 7885 yuan/ton, a decrease of 0.30% compared to the second quarter and 2.79% compared to the same period last year. In the third quarter, the high point of the average price of PVC paste resin glove material in North China appeared at 8125 yuan/ton in early July, and the low point of the average price was 7600 yuan/ton in late September.
From the perspective of price trend changes, the overall price of domestic PVC paste resin in the third quarter showed a stable trend followed by a continuous decline. As the end of September approached, prices gradually stopped falling, and some grades attempted to see a slight upward boost. Although the equipment maintenance of domestic PVC paste resin production enterprises was relatively concentrated in July and August, and the industry's operating load rate declined, the market demand side showed weak performance, downstream product industry orders were poor, and due to the influence of high temperature and rainy weather in the south, the operating capacity of product enterprises declined, and the enthusiasm for purchasing raw materials was not good. In mid to early September, the traditional peak demand season for domestic sales did not materialize, and some downstream product industries did not perform well in terms of export orders. Due to the impact of India's anti-dumping measures, there were few sources of goods exported to the country. Domestic PVC paste resin enterprises still faced shipping pressure, and the prices of bulk materials continued to decline. However, the demand for glove materials remained relatively stable with little price change. In late September, there was a demand for replenishment before the National Day holiday in the downstream, and there was no pressure on the inventory of supply side enterprises. At the macro level, the State Council Information Office released a series of policies, including reserve requirement ratio cuts, interest rate cuts, interest rate cuts for existing houses, reduction of down payment ratio for second homes, and a series of innovative policy tools to support the stock market. Strong macro expectations drove a significant increase in PVC futures, and the market mentality of PVC paste resin also received some boost. The trading atmosphere has improved.
From this perspective, the driving factors affecting the price trend of PVC paste resin powder in the third quarter mainly come from the supply side, domestic demand, and export:
The operating load rate of industries with concentrated enterprise maintenance has declined
In the third quarter, some
PVC Resin paste enterprises underwent centralized maintenance of their equipment, resulting in a decline in the industry's operating load rate. As of September 26, the operating load rate of the
Pvc Resin paste industry in the third quarter was 68.60%, a decrease of 5.63 percentage points from the second quarter. Among them, the operating load rate of the calcium carbide method PVC resin paste production enterprise was 71.63%, a decrease of 10.59% from the second quarter, and the operating load rate of the ethylene method PVC resin paste enterprise was 54.86%, a slight increase of 0.97 percentage points from the second quarter. In July and August, some PVC paste resin powder production enterprises underwent centralized equipment maintenance, resulting in increased maintenance losses. In September, the number of maintenance enterprises gradually decreased, and production gradually rebounded. The estimated production of PVC paste resin powder in the third quarter is 284400 tons, a decrease of 6.14% compared to the second quarter. Although the industry's operating load rate has declined and most companies currently have no inventory pressure, due to poor overall performance on the demand side, there is still pressure on companies to ship, and prices have continued to decline.
The demand for PVC paste resin glove material is still acceptable, and the demand for PVC paste resin large plate material varies
In the third quarter, there was little change in the downstream PVC glove products industry's production of PVC paste resin powder, with an overall production of 460-500 products. In July and August, the purchase of raw glove materials was still mainly on dips, and the demand for high priced brands was not good. In September, the export order prices of glove product enterprises decreased, and some small and medium-sized product enterprises saw a decline in production. However, the production lines of large product enterprises slightly increased compared to the previous period. PVC gloves exported 8.416 billion pairs in July and August, an increase of 30.65% year-on-year.
The overall demand performance of the downstream product industry for PVC paste resin large sheet materials in the third quarter was lukewarm. On the one hand, July and August were the traditional off-season for demand, and some downstream product industries such as leather and foam materials had poor downstream orders and production, and were affected by high temperatures and rainy weather in the south. Downstream product enterprises had weak production performance and lacked enthusiasm for raw material procurement, with rigid demand procurement being the main focus. Although September has entered the traditional peak season, some downstream industries have not seen any improvement in product orders, with short-term orders in the coated fabric industry being the main focus. Some long-term export orders have not been placed, and orders and production in the toy industry are inconsistent. The overall demand performance of the PVC paste resin large plate material industry is lukewarm, and the overall demand in the first half of September is still poor; In the second half of September, due to the approaching National Day holiday, most downstream companies entered the market to replenish goods, and the phased centralized replenishment brought short-term demand improvement.
Export reduction enterprises still face domestic sales pressure
As the Ministry of Commerce and Industry of India made a preliminary anti-dumping determination recommendation on Polyvinyl Chloride Paste Resin originating in or imported from Chinese Mainland, South Korea, Malaysia, Norway, Thailand and Taiwan, China of China on April 26, 2024, the source of goods exported to India began to gradually decrease from May to June, and there was almost no quantity from July to August. The export volume of PVC paste from China in July and August 2024 was 15700 tons, a decrease of 41.96% compared to the same period last year. The overall export atmosphere is poor, and domestic PVC paste resin enterprises still face domestic sales pressure.
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The driving factors affecting the price trend of domestic PVC paste resin powder in the fourth quarter are still mainly based on the supply and demand fundamentals. The overall supply side remains relatively high, and the demand side has limited bright spots. The price of PVC paste resin may fluctuate weakly. The main driving factors affecting the price changes of domestic PVC paste resin in the fourth quarter are shown in the table below:
Supply side: Due to the cooling weather in the fourth quarter, most enterprises will not arrange scheduled equipment maintenance. Except for a few long-term shutdown enterprises, the operating load rate of most in production enterprises may still remain high. Before the National Day holiday in October, most companies had good shipments and had worry free inventory. Overall, there was not much inventory pressure on companies in October, and their mentality was still good. In November and December, as the industry's operating load rate continued to be high, supply side pressure may gradually increase.
On the demand side: In terms of domestic demand, the current order prices for glove products are relatively low, with large product enterprises being the main ones in production, and some medium-sized product enterprises operating at a moderate pace. It is expected that the overall demand for product orders will be flat in the fourth quarter, and the number of glove production lines operating is unlikely to change significantly. Downstream purchases are still mainly made at low prices, and the demand for high priced brands may be average. The demand for downstream products of PVC paste resin bulk materials in the fourth quarter still needs attention. If export orders improve, it will drive an increase in demand for bulk materials. However, if export orders do not improve, it is expected that the demand for PVC paste resin bulk materials will remain flat. In terms of exports, due to the cold winter weather, downstream production in a certain European country has slowed down, and it is expected that the inventory of goods exported to Europe will decrease.
On the raw material side, it is expected that the price center of calcium carbide in the fourth quarter may shift upward compared to the third quarter. Looking at the month by month, with the end of the National Day holiday in October, there may be a concentrated arrival of goods downstream. Coupled with the maintenance of Dezhou Shihua, Shandong Xinfa, and Henan Lianchuang in October, most downstream purchases may not be as active as in September. On the supply side, the temporary production of unstable calcium carbide furnaces may gradually return to normal due to maintenance or temporary production in September. The overall stability of the industry's operation has improved compared to September, and the pressure on calcium carbide factory shipments is gradually emerging, leading to a downward trend in prices. However, due to the strong support of cost side orchid charcoal prices, the expected price decline is limited. In November, the price of calcium carbide mostly remained flat at a lower level, but if the PVC market improves, downstream production increases, and the demand for calcium carbide increases, there is still a possibility of upward movement. In December, on the supply side, with the weather turning cold and the stability or relative deviation of the operation of the calcium carbide furnace, there may be a temporary decrease in the supply of calcium carbide; On the demand side, most PVC producing enterprises are starting or maintaining production in the early stage, and some regions have plans to put BDO into operation, which is expected to increase the demand for calcium carbide; On the cost side, winter is the peak season for coal consumption, and it is expected that the price of blue charcoal may provide support for the bottom of calcium carbide. Driven by both supply and demand as well as cost, it is expected that the price of calcium carbide will slightly increase in December.
Overall, the operating load rate of the supply side industry remained relatively high in the fourth quarter, with ample supply. The demand side is concerned about changes in downstream product orders, but still needs to pay attention to the impact of macro news. It is expected that supply side enterprises will not have inventory pressure in October, and there may be some tentative upward trend in enterprise quotations in the first half after the National Day holiday. However, in the second half of the year, stable shipments may be the priority. The supply pressure in November and December may gradually increase, and there may be downward expectations in price trends. It is expected that the overall price of PVC paste resin will be weak and volatile in the fourth quarter.
