Introduction: In 2022, domestic PVC consolidation at the beginning and end of the year, and a sharp fall in the middle of the year, price driven in the supply and demand changes and cost profit, policy expectations and consumption weakening between the transformation. The changes of the entire market in 2023 are still driven by expectations on the macro side, and the implementation of the final price is still subject to changes in supply and demand side.
In 2023, new production capacity will be released and more enterprises will reach production capacity
By the end of 2022, 400 thousand tons of new equipment of Shandong Xinfa and 200 thousand tons of equipment of Qingdao Bay have reached production, while Cangzhou Yulong and Guangxi Huayi delay production to 2023. In addition, Shaanxi Jintai, Fujian Wanhua and other enterprises plan to put 2.1 million tons of equipment into production in 2023, and the enterprises listed in the above table may release more production capacity in 2023. It is expected that China’s PVC production capacity will reach 28.52 million tons in 2023
In 2022, due to the poor profit of the PVC industry, marginal enterprises in the second half of the year have significantly decreased or stopped production. It is expected that the capacity utilization rate of PVC industry in 2023 will be higher than that in 2022, and the annual output may reach 2300 tons. Coupled with the high futures inventory in 2022, the supply will maintain the incremental mode in 2023.
Judging from the country’s current policies, 2023 will be the year of domestic economic development and consumption. PVC demand is expected to increase by 6.7% in 2023. Traditional demand is maintained at 2% to 3% growth; Construction pipe, packaging sheet, soft products, medical products are expected to lead the growth point. Before 2022, PVC has a high correlation with real estate, and its main downstream pipes, profiles, doors and Windows and other hard products are widely used in real estate. In 2022, due to the prolonged real estate downturn, the proportion of PVC downstream products in cable material, pipe material, sheet material and film material increased slightly.
To sum up, the domestic PVC supply will increase in 2023, but because the growth rate of production expansion is higher than the growth rate of demand, and the global economic growth is likely to slow down in 2023, the recovery growth rate of domestic is limited by the prosperity of the terminal industry. Downstream, the traditional profile, flooring market competition increases, pipe, pipe fitting processing industry will continue to dominate the main demand for PVC, cable material, film material, sheet material industry there are new development opportunities. Supply and demand pressures will gradually digest over time, and the high inventory pattern may improve in the second half of 2023.
Post time: Jan-10-2023