China's PVC market: Strict supervision and promotion of industrial upgrade

1. China's PVC supply and demand continue to grow, breaking through 20 million tons

Polyvinyl chloride (Polyvinyl chloride PVC), polyethylene (PE), polypropylene (PP), polystyrene (PS) and ABS are collectively referred to as the five general-purpose resins. PVC has the characteristics of flame retardancy, wear resistance, chemical resistance, electrical insulation and easy processing. It is one of the wide variety of plastics in the field of application. It is used in industry, construction, agriculture, daily life, packaging, electricity, and public utilities. Widely used in other fields.

From the perspective of production, China's polyvinyl chloride (PVC) resin output and apparent consumption have maintained a steady upward trend in 2015-2019. According to China's chlor-alkali network data, China's PVC output in 2019 was 21.01 million tons, an increase of 7.3% over the previous year, and the apparent consumption was 20.23 million tons. In 2019, my country's PVC supply and demand exceeded 20 million tons.

From the perspective of PVC prices, according to the professional website of commodities, the overall price of China's PVC is in a declining trend from 2019 to 2020, with an average price of more than 6500 CNY/ton. In 2020, due to the restrictions on the resumption of new crown epidemic enterprises, the decline in China's PVC prices Larger. It decreased from 6,825 CNY/ton on January 31, 2020 to 5,450 CNY/ton on April 1. With the resumption of production in PVC-related industries, PVC prices may rebound slightly in the future.

2. China's PVC imports and exports have fallen and are in deficit

From the perspective of PVC imports and exports, from 2017 to 2019, China's PVC imports and exports continued to decline. In 2019, China's PVC imports amounted to 787,900 tons, down 5.7% year-on-year; exports were 672,500 tons, down 8.9% year-on-year.

From the perspective of PVC import and export value, from 2017 to 2019, China's PVC import and export value showed a downward trend. In 2019, the import value was 760 million US dollars, down 13.1% year-on-year; the export value was 659 million US dollars, down 7.2% year-on-year. From January to February 2020, China's PVC imports amounted to US$99 million and exports amounted to US$85 million. China's PVC imports and exports are in a state of trade deficit overall, but the trade deficit has shrunk.

3. Tightening policy supervision and promoting industrial upgrading

In November 2019, the National Development and Reform Commission issued the "Guidance Catalogue for Industrial Structure Adjustment (2019 Version)", which will take effect on January 1, 2020. The 300,000-ton/year ethylene oxychlorination polyvinyl chloride production plant is classified as restricted. For this kind of production plant, investment in new projects will be prohibited, and the investment authority will not approve, approve, or file; each financial institution shall not Issuing loans, etc.

In February 2020, the "Key Work Plan for Industrial Energy Conservation Supervision in 2020" pointed out that in accordance with the "13th Five-Year Plan" full-energy-conservation supervision arrangement for high-energy-consuming industries, the mandatory energy consumption per unit of product should be carried out for key energy-consuming enterprises in the PVC industry Special supervision on the implementation of quota standards.

Overall, the tightening of PVC industry policy supervision in 2020 will, on the one hand, promote the upgrading of its industrial structure and promote industry reshuffle on the future development of the PVC industry. On the other hand, it will have a negative impact on the PVC industry's short-term expansion of production.