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Core point of view: The external price continues to weaken, the domestic PVC export has no price competitive advantage, the price for volume mode is difficult to continue. Import expectation highlights, domestic PVC price ceiling pressure.

External price continues to weaken, import pressure highlights

The price of PVC outer plate in 2022 fell significantly, especially after late April, the market went down step by step, to mid-October has fallen below the level of the same period in previous years. December Asian market prices are expected to be released next week, market merchants believe the drop in the range of $50 to $100 / ton, and container freight rates are also falling, the drop may exceed expectations. Moreover, the Indian market is reported to be offering prices of $720-730 / ton CFR India for January delivery from US sources, nearly $100 / ton lower than the current spot price. At present, CFR in China is equivalent to about RMB 6700 / ton, which is not enough to impact the domestic market. However, according to the calculation of forward price, CFR in China is expected to break 6, which will form import pressure on the domestic market.

Export off-season has passed, but the late quantity can be limited

From January to September 2022, the domestic PVC powder export volume increased by 23.67% compared with the same period in 2021, which was mainly driven by the active market development of domestic PVC enterprises and trading enterprises from the second half of 2020. From the later stage, the domestic demand of the United States is weakened, Europe is affected by energy and the demand for PVC is not good, the competition in the Asian market is intensified, the quotation of the United States, Japan, South Korea and Taiwan is driven downward, and the export market of China is facing greater pressure, so it is difficult to promote the price for quantity, and the export capacity is limited in the later stage.

Domestic FOB price has no advantage, foreign procurement enthusiasm is poor

From the point of view of recent foreign trade signing volume of PVC enterprises, the transaction of various enterprises is very poor, and part of the weekly degree presents a state of 0 signing. Mainly by the price impact of other countries, domestic calcium carbide PVC enterprises have no price advantage in foreign trade export. Ethylene law enterprises only rely on long about the volume of households, but also to yield profits, at the price of the volume of export enthusiasm is not high. In addition, the European and American economies are not good, leading to Asia’s main export processing products difficult to increase, the demand for powder also reduced.

Outer plate to suppress the price of inner plate, domestic PVC facing the upper limit

The current FOB China main port and FOB Taiwan PVC price is positive, higher than the same period in 2021. This also means that the current price advantage of domestic PVC FOB China main port is significantly lower than that of last year, and it will face the pressure of external dumping, and the export price will be the upper limit of domestic PVC price.

To sum up, the global PVC supply in 2022 is relatively sufficient, and there are fewer accidents and disasters. In terms of cost accounting, ethylene method has more advantages than domestic calcium carbide method, and there is no loss for the time being. In the context of poor demand in Europe and the United States, dumping to Asia is more obvious. Under the expected impact of successive low prices in December and January, domestic exports are not only difficult, but also facing the impact and competition from imports. The incremental export advantage accumulated in January-September 2022 is likely to be dragged down in the later period. Although domestic PVC has the cost and chlor-alkali balance to lead to the bottom support, but its rebound ceiling will be suppressed by demand, the price of the outer plate will be the domestic PVC price ceiling.