October PVC Prices Rise Then Fall; Calcium Carbide Producers Face Increasing Losses, Ethylene Producers Narrow Losses

In October, the price of polyvinyl chloride (PVC) experienced fluctuations of first rising and then falling. The center of gravity in prices has moved higher compared to September, but the move has not been uniform. Specifically, the cost of the two main production processes, calcium carbide method and ethylene method, fluctuates, resulting in the performance of the company in the gross profit side also shows a fluctuant situation. In the calcium carbide method, the average gross profit loss is aggravated, while the ethylene method enterprises have a loss in the average gross profit level.

In the domestic PVC market, the market in October showed a trend of rising first and then falling. Despite the traditional peak season, the demand has not performed as well as expected, and the confidence of market participants is not strong. As macro sentiment faded, spot prices began to wobble. At present, downstream enterprises just need to replenish at dips, the overall order situation is general, and the enthusiasm of replenishment is not high. In the absence of the volume of cooperation, the market price rise as a flash in the pan, fleeting. As of October 29, the average monthly price of Changzhou SG-5 was 5,424 yuan/ton, down 3.43 percent month on month and 8.46 percent year on year.

On the cost front, the cost performance of firms in different processes was mixed in October. The production cost of carbide PVC rose to 5646 yuan/ton, up 3.65% month on month; The production cost of PVC by the ethylene process decreased slightly to 5,752 yuan/ton, down 1.19% from the previous month. As the domestic PVC price rose first and then fell in October, but the price center moved up, the production gross profit of different process enterprises showed a certain differentiation. The average monthly gross profit of carbide PVC was -404 yuan/ton, which decreased by 101 yuan/ton compared with last month, and the loss margin increased; The average monthly gross profit of ethylene PVC was -37 yuan/ton, an increase of 141 yuan/ton compared with the previous month.

Specifically, the gross profit performance of enterprises with different production processes in October is not the same. For carbide PVC enterprises, the main factor affecting their gross profit is the fluctuation of carbide price and PVC price. At the end of raw material calcium carbide, the price of calcium carbide continued to rise during the National Day, and the mainstream trade price in Wuhai area rose to 2900 yuan/ton. The overall market showed a tight supply of goods and a rapid rise. However, with the increase of downstream PVC maintenance after the festival, the demand for calcium carbide weakened, and the price fell successively. As of October 28, the mainstream trade price in Wuhai area is 2700 yuan/ton. Although the price has fallen recently, it has not yet fallen to the lowest point in September. Therefore, the average price of calcium carbide enterprises in October still rose by different ranges compared with September, ranging from 100 to 230 yuan/ton. As far as calcium carbide method is concerned, the increase in the cost end of PVC is greater than the increase in its selling price, resulting in a continued decline in gross profit of calcium carbide method in October.

For ethylene process PVC enterprises, the main factors affecting their gross profit include changes in the selling prices of crude oil, ethylene, vinyl chloride and their PVC. Raw material prices have fallen in different ranges in the month, resulting in a slight decline in the cost of ethylene method. At the same time, due to the upward shift of PVC price center, transmitted to the profit end, the profit has increased, ethylene method enterprises reduce losses.

November PVC market may maintain a weak shock. On the cost side, calcium carbide prices are expected to rise, providing certain cost support for PVC. Despite the macro force, but the PVC market is still difficult to get rid of the basic weak supply and demand reality. The game between long and short drivers can make the market a little sticky. As the weather in the north gradually turns colder, weaker demand has become a fact. However, the upstream PVC device maintenance is reduced, the supply side maintains an abundant state, and the situation of oversupply continues, which is difficult to drive the market to improve. To sum up, it is expected that the PVC market will continue to be weak in the short term, and the price may dip slightly.