Since the Spring Festival in 2021, driven by the bull market of chemical bulk commodities, the domestic PVC (8489, 91.00, 1.08%) market also showed a rapid rise mode. Especially in the second half of the year, the PVC price broke through the 10000 yuan mark at one stroke, reaching a new high in recent ten years. However, the highlight time was not long, and then the price continued to decline, and the increase was basically spit back. According to the data monitored by the business society, the average price of domestic PVC mainstream at the beginning of the year was 7320 yuan / ton, and the average price of domestic PVC mainstream at the end of the year was 8410 yuan / ton, an increase of 14.89% during the year. The lowest price of the whole year was 6962.5 yuan / ton in January, and the highest price of the whole year was 14525 yuan / ton in October, an increase of 14.89% during the year.
2021 PVC rose and fell during the cycle, but rose more and fell less. The biggest decline was in October, down 18.17% for the whole month, and the biggest increase was in September, up 34.45% for the whole month. The lowest price of the whole year is in January, and the price is 6962.5 yuan / ton. The highest price of the whole year is in October, and the price is 14525 yuan / ton.
Market Review
PVC prices rose steadily in the first quarter. In January, the off-season demand is expected to weaken, especially the poor transportation in some parts of the north, and some downstream enterprises shut down for holidays in advance, resulting in a decline in the operating rate. In addition, the price of raw calcium carbide fell, there were fewer maintenance enterprises, sufficient market supply and weak trading atmosphere, with a decrease of about 2% for the whole month. In February, PVC prices stopped falling and turned up. Especially after the festival, crude oil led the energy and chemical sector to soar, and the PVC market rose in a large area, with an increase of about 23% for the whole month. In March, affected by the dual control policy of energy consumption in Inner Mongolia, the raw material calcium carbide hit a 10-year high, the cost support was strong, the PVC export was better, the disk was stronger, and the futures price rose to a new high in recent 10 years. During the quarter, it increased by 19.71%.
In the second quarter, the PVC market grew first and then declined. In April, PVC was boosted by the demand in the peak season, the strength of the disk, the high level of raw materials, device maintenance, favorable external market and tight supply. The market increased by about 3% in the month. In May, the PVC maintenance devices were relatively concentrated, the supply side was tightened, and the PVC rose as expected in the peak season. However, at the two executive meetings of the State Council, the rise of the commodity market was continuously "named". Driven by macro sentiment, the PVC market continued to decline, with an increase of 2.09% in the month. In June, the market gradually turned to the off-season, and the maintenance of PVC devices basically entered the closing stage. The market showed a weak situation of increased supply and reduced demand, resulting in a gradual decline in prices, with a decrease of 1.64% in the month. During the quarter, it increased by 3.6%.
PVC rose strongly in the third quarter, exceeding 10000 yuan. In July, the price of PVC was not adjusted much. In the second half of the month, the futures broke through the 9000 mark strongly. In addition, due to the influence of the limited power policy of raw calcium carbide, the supply of goods was tight, so that the price rose to more than 5000 yuan / ton. The cost support was strong. PVC went up in line with the trend, with an increase of 1.53% in the month. Although the PVC market was in the off-season in August, the price of raw calcium carbide increased due to the dual control of energy consumption. The cost of PVC enterprises was under pressure, the operating load decreased, the on-site supply decreased, and the price rose steadily. At the end of the month, under the influence of Hurricane "IDA", the disk showed signs of weakening, with an increase of 2.46% in the month. In September, with the strong support of cost and supply, the PVC market continued to rise, and the futures price once rose, driving the spot market to soar above 10000 yuan, a new high in recent three years. Increase of 39.86% in the quarter
In the fourth quarter, the PVC market changed from rise to fall, opening a downward channel. In October, the price of PVC rose to the peak of 14525 yuan / ton in the year, but in the second half of the month, the macro policy took action to intervene in the coal price, the disk fell sharply, the goods fell by the limit on the 13th, 14th and 20th days, and the spot market price quickly fell below 10000 yuan, a decrease of 16.58% in the month. In November, driven by the disk, the futures prices fell continuously, and the spot market fell rapidly to the price level in August. The early increase was basically spit back, with a decrease of 9.32% in the month. In December, the demand in the off-season gradually weakened, especially in the north, the temperature decreased significantly, the construction started to decline, the demand decreased, and the market trading was light, with a decrease of 7.68% in the month. During the quarter, it decreased by 33.19%.
In 2021, the export volume of PVC powder increased significantly year-on-year, and the activity increased. According to the data, the import volume of PVC pure powder in China in November was 34800 tons, a year-on-year decrease of 30.25%, a month on month increase of 13.36%, and the export volume was 114800 tons, a year-on-year increase of 6.86% and a month on month increase of 2.78%. From January to November, the export volume totaled 1562100 tons and the import volume totaled 368500 tons.
In recent years, China has entered the stage of rational growth of PVC production capacity. By the end of 2021, the domestic PVC production capacity was about 28.35 million tons. In 2021, the new production capacity was 1.06 million tons, with a growth rate of 4.1%, which was lower than the expected increase in production. The new production capacity planned to be put into operation in 2022 was 2.78 million tons, but the actual landing of some units was uncertain, so it may be lower than the expected.
The property market will cool down again, the growth rate of real estate completion will fall, and it may continue to decline in the short term. According to the website of the National Bureau of statistics, from January to October, the national real estate development investment was 12493.4 billion yuan, a year-on-year increase of 7.2%; It is 14.0% higher than that from January to October 2019, with an average growth of 6.8% in the two years. From January to October, the sales area of commercial housing was 1430.41 million square meters, a year-on-year increase of 7.3%; It is 7.3% higher than that from January to October 2019, with an average growth of 3.6% in the two years. From January to October, the housing construction area of real estate development enterprises was 9428.59 million square meters, a year-on-year increase of 7.1%. Among them, the residential construction area was 6678.01 million square meters, an increase of 7.4%. The new construction area of houses was 1667.36 million square meters, down 7.7%. Among them, the newly started residential area was 1234.81 million square meters, down 6.8%. The completed housing area was 572.9 million square meters, an increase of 16.3%. Among them, the completed residential area was 414.15 million square meters, an increase of 16.9%.
Future forecast
To sum up, in 2021, due to the extreme cold weather, some overseas units were shut down, the international supply was tight, the domestic energy consumption dual control policy was implemented, and the raw material price rose to a ten-year high, driving PVC to constantly refresh its historical high. Under the high cost, the whole PVC industry chain also had poor profits, and downstream procurement only maintained rigid demand, with strong resistance. In the fourth quarter, under the influence of macro policies and the decline of cost support, PVC also responded to the law that it will fall sharply after a sharp rise. The price continues to fall until the end of the year and is about to enter January. The impact of the off-season demand will continue. Downstream users will stop work and take vacation one after another, and the market demand will further reduce. However, PVC manufacturers are normal, the situation of market supply exceeding demand may be prominent, and the PVC market is expected to fall.
