In April, after the China Securities Regulatory Commission approved Dalian Commodity Futures Exchange for the launch of PVC futures trading, Dashang announced the PVC futures contract and related rules and asked for advice from the new society. In early May, the DCE Council reviewed and approved the “Report on the Elaboration of PVC Futures Contracts and the Amendment of the Related Implementation Rules†and immediately submitted the PVCC Futures Contract to the China Securities Regulatory Commission. For the specific listing date, according to the previous requirements of the members of the company to do a good job on the 25th of this month, PVC futures preparations for listing. It is inferred that PVC futures are likely to be listed on the 25th of this month.
According to historical experience, there will be better investment opportunities in the early stage of the listing of futures varieties. Therefore, it is necessary to analyze the price trend of PVC spot by analyzing many factors, so as to help investors choose more rational trading strategies.
I. Oversupply situation still exists. From the perspective of production capacity, China's PVC production capacity has continued to grow during the past five years, especially the calcium carbide process. In 2008, China's PVC production capacity was approximately 15.81 million tons, an increase of 9.18% from 14.48 million tons in 2007. In the 7 years since 2003, China's total PVC production capacity has maintained a sustained growth, of which capacity growth has been the largest in 2005 with an annual growth rate of 46.38%. At the same time, in the period from 2003 to 2007, the annual growth rate of China's total PVC production capacity has been maintained in double digits. An important reason for the continuous expansion of PVC production capacity in China is that China's economy has maintained a relatively high rate of development since 2003. In 2008, for the first time in six years, China's PVC capacity growth rate was lower than 10% for the first time. This was due to downstream demand. The growth rate is lower than the speed of expansion of PVC production capacity. On the other hand, it is also a direct reflection of the full impact of the “financial crisis†on China's chemical industry.
In addition, from the perspective of output, due to the impact of the financial crisis in 2008, the PVC production growth rate of China's PVC rapidly declined to 8.82 million tons this year, a drop of 9.26%. After entering the year of 2009, the domestic market is still in a weak demand pattern, which remains relatively flat, coupled with the continuous increase in supply and the constant inflow of some imported raw materials, the pressure is still increasing. The enterprises of their respective companies flexibly shipped according to their own conditions, and some of the operations were loosened, and some of them were still delivered to the old ones in the previous period, mainly to old customers and fixed users. Due to the lower gross profit margin of PVC, the operating rate of the manufacturers remained low. Except for companies that had previously had more orders, the operating rate of most companies remained at around 50% to 80%. In addition, judging from the current price of calcium carbide, the price of calcium carbide may further decline. Therefore, once the demand recovers, the gross profit margin will increase, and the operating rate of the manufacturers will rebound. This will be a repressive factor for the rise of PVC prices.
Second, the weak demand for downstream products In recent years, with the rapid development of the real estate industry, domestic construction plastics (9740,145.00,1.51%) and the average market share of plastic doors and windows gradually increased, reaching 50% and 25%, respectively. Approximately 1.5 million tons of various plastic pipes and doors and windows profiles will be required. Together with polymer waterproof materials, decoration materials, insulation materials and other construction plastic products, the total demand is about 5 million tons. However, due to the weakening of the real estate industry, the demand for PVC in the construction industry has dropped sharply, resulting in a lower operating rate of PVC downstream pipe and profile companies, and thus the demand for PVC remains low. The market wait-and-see atmosphere is further aggravated, and it is also difficult for merchants to ship. Gradually increase. Although China's domestic demand for PVC will increase with the increase in investment in fixed assets in China, there is a long-term lagging process. In the short term, there is still no sign of increasing domestic demand for PVC.
Although the Chinese government has again raised the export tax rebate on a large scale since April 1, 2009, the corresponding amount of PVC products is limited. Therefore, in the short term, the increase in the export tax rebate rate will not significantly stimulate the demand for PVC. According to customs statistics, Guangdong exported 675,000 tons of plastic products in the first quarter of 2009, a decrease of 19.3% compared with the same period of 2008, and the value was 1.19 billion US dollars, a year-on-year decrease of 7.1%. Mainly exported to the United States, the European Union and Hong Kong. In the first quarter, Guangdong exported 197,000 tons of plastic products to the United States, a drop of 24.6%; it exported 105,000 tons to the EU, a drop of 26.3%; it exported 103,000 tons to Hong Kong, a decrease of 22.3%; and combined exports to the three markets accounted for 59.9%. . Since the external economy will take some time to improve, the export of PVC downstream products will maintain a weak position. However, overall, due to the lack of a clear improvement in the economic situation, the demand for PVC remains weak.
Third, prices have been suppressed by imports From the calendar year of changes in the amount of imports, China's PVC imports showed a year-on-year decline. Before 2004, China's PVC was mainly imported. In 2003, China's apparent consumption of PVC was about 6 million tons, while imports were 2.3 million tons, and the foreign dependency was 38%. Since 2003, China has imposed anti-dumping measures on polyvinyl chloride in the United States, Russia, Taiwan, Korea, and Japan. At the same time, the domestic PVC industry has also developed rapidly. China's PVC self-sufficiency rate has been increasing year by year. By 2008, China's PVC Apparent consumption of 9.02 million tons, including imports of 1.06 million tons, self-sufficiency rate of 88%. However, starting from 2009, due to the low price of crude oil, there is a clear advantage in the price of PVC in overseas ethylene production, so the import of PVC began to rise.
According to customs statistics, from January to March 2009, the total amount of PVC powder imports in China was 531,100 tons, of which China imported 229,900 tons of PVC powder in March, with an average price of 680 US dollars/ton, which was an increase of 18,000 tons from February, close to 9.25%. The main source is 39,100 tons in Japan and 35,300 tons in Taiwan Province. In addition, China imported about 39,148 tons of PVC from the United States in March, which is a further increase from the 36,526 in February and 13,799 in January. It is expected that U.S. sources of goods will continue to flow into the Chinese market, but the overall oversupply situation has kept domestic prices low. However, the influx of U.S. sources of goods as a whole is not the only reason for the Asian market to drop its prices. The freight rate for U.S. transport is around 80 U.S. dollars per ton, while the overall supply to Asia is still below 720 U.S. dollars per ton. It can be said that as long as the price of crude oil remains low, overseas PVC is still a major factor in suppressing the price increase of PVC.
IV. Summary In conclusion, the impact of PVC supply, downstream demand of PVC products and import factors will make it difficult for domestic PVC to experience price increases in the short term. However, taking into account the fact that the current gross profit margin of PVC manufacturers is relatively low, the spot market for PVC may fluctuate between 6150 and 6300 yuan/ton. However, Chinese futures investors have the characteristic of buying up or not buying. Most of the varieties are listed on the first day of trading. Therefore, investors can formulate their own investment strategies accordingly.