The price of PVC resin is rising, the product industry is greatly affected

Recently, some sub-industries and enterprises have continuously received feedback that the price of PVC resin has risen abnormally and rapidly, from about 6,000 CNY/ton to nearly 9,000 CNY/ton, and futures prices have risen significantly.

　　 It is reported that in 2019, more than 10 million tons of PVC resin were used in the sub-sectors of PVC pipes, doors and windows, panels, foam products, artificial leather, synthetic leather, and plastic shoes. In 2019, the price of general-purpose PVC resin runs between 6000-7500 CNY/ton.

　　 Due to the impact of the epidemic, the price of PVC resin reached the lowest point of 5,000 CNY/ton at the end of March 2020. The product industry was also greatly affected, and the market demand for most products fell. The market demand is steadily rising. In early October, the price of PVC resin quickly rose to 7,000 CNY/ton. In early December, the ex-factory price of PVC resin exceeded 8,500 CNY/ton, and some companies' prices exceeded 9,000 CNY/ton on December 11. Some sheet companies purchase PVC at a price of 9,150 CNY/ton. Many PVC raw material companies in the market stopped quoting, and warehouse stocks in individual regions were exhausted. Some companies use pre-sale sources for one to two weeks, and they need to wait in line for delivery.

　　 The abnormal rise in the price of PVC has caused great harm to the PVC product industry. It is understood that the overall production of PVC downstream products has not increased, the product market capacity has not changed much, product prices are relatively stable, and the price of raw materials has risen sharply. It is difficult for product companies to raise prices. Some product companies have already sold more PVC products. The phenomenon of multiple losses. Some companies suspend the purchase of PVC raw materials and the processing of PVC products. For the continuity of the market, some companies can only make up the previous profit to the loss, and try to control the production and sales of PVC products. A large-scale PVC pipe manufacturer reported that the current prices of PVC resin and PE resin are the same, or even slightly higher, which will weaken the competitiveness of the PVC pipe market. Manufacturers will increase their willingness to recommend the sale of PE pipes, which will not be conducive to the PVC product market in the long run.

There are also hard PVC product companies that report that the products are facing high tariffs on exports to North America. For example, tariffs of 25%-30.8% in the United States, ocean freight has risen 2-3 times of previous years, and RMB appreciation and other unfavorable factors. Although the price is around 6,400 CNY/ton (800 Euro/ton), due to my country’s anti-dumping of PVC resin in the international market, foreign PVC resin cannot enter the country. The domestic PVC raw materials fluctuate sharply, which makes the export of products worse.

　　 In 2020, against the background of the decline in crude oil prices and the sharp decline in the price of polyolefin raw materials, the price of PVC will increase sharply against the trend, and there will even be no goods. In some places, it can only be bought with high cash prices. Some PVC product companies worry that the sharp increase in prices will have a major impact on the development of the industry, making the industry companies unable to survive, and ultimately hurting the PVC raw material companies. The industry calls for maintaining stable and reasonable prices for PVC, jointly maintaining a good market order, and ensuring the healthy and sustainable development of the industry.

　　 Regarding the current price increase, I have learned from relevant industry associations that the current price fluctuation of PVC resin is the market reason, and there is also a pull in the price of upstream calcium carbide, and the increase in transportation prices is also an influencing factor. Some relevant people also analyzed that it is an unreasonable phenomenon that the price of PVC resin increases sharply against the trend. There are short-term panic factors, and there will be a trend of returning to normal soon.