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PVC Market review in 2021 and Outlook in 2022 Jan 13

Raw calcium carbide price rise: raw calcium carbide price rise beyond market expectations, constantly hit a record high, in addition to its own supply and demand tightening, the policy end of calcium carbide market impact. In 2021, the price of calcium carbide has moved up steadily, and the market is in a tight situation for most of the time. The profit of calcium carbide factory has improved significantly. The influence of industrial policies on the development of calcium carbide market is long-term. The calcium carbide capacity expansion scale is limited, and some outdated capacity is eliminated, so the calcium carbide market is gradually moving towards a balance. In 2022, after the tight supply of calcium carbide market is eased, the price may fall steadily, but the cost end of PVC has risen significantly.

In 2021, the newly added PVC production capacity is limited, with a total of only 520,000 tons. The supply scale of PVC market reaches 27.645,000 tons, and the growth rate of production capacity slows down significantly. The production of some units is scheduled to be postponed to 2022. If it can be put into production as scheduled, China's PVC production capacity will be close to 30 million tons, but the production schedule of some units is still uncertain. PVC industry is in a boom cycle, and the weak balance between supply and demand provides a solid foundation for PVC price rise.

 The export volume of PVC has seen explosive growth, and the driving effect of foreign trade on THE PVC market has been significantly enhanced in 2021. The number of export orders increased, and the monthly export volume of PVC kept setting new highs. In 2022, overseas plant construction will further recover, PVC export arbitrage opening time will shorten, export volume will fall.

Affected by the rising price of raw materials and the shortage of supplies, the PVC industry also started to decline, resulting in an increase in lost output. In addition to the export boost, the supply - led market intensified. Statistics show that from January to November, PVC production totaled 20.3109 million tons, compared with 18.8690 million tons in the same period last year, an increase of 1.4419 million tons, up 7.64%. The PVC production level gradually returned to normal, coupled with the release of some new production capacity, PVC output showed a steady increase, but the supply side did not exert great pressure on the market.

 In recent years, the domestic demand for PVC pipe fittings has grown steadily, mainly due to the increase in the demand for real estate and urban infrastructure construction. The demand for new PVC flooring, wallpaper, wood plastic and other home decoration is growing rapidly, the export of floor paving materials is improving, and the overall demand for building materials is increasing steadily. Therefore, the development of domestic real estate construction plays a decisive role in PVC market demand.

PVC apparent consumption fluctuations narrowed, indicating that the market demand side to restore calm. Statistics show that from January to November, PVC apparent consumption accumulated to 9,117,400 tons, compared with 19.245,900 tons in the same period of 2020, a narrow drop of 0.67%. The average monthly apparent consumption of PVC in 2021 was about 1.7379 million tons, slightly lower than the same period in 2020. From 2019, apparent CONSUMPTION of PVC exceeded 20 million tons. According to the market demand, the PVC apparent consumption in 2021 remains near 20 million tons, which is difficult to make a significant breakthrough.

Winter and the beginning of the year, the market demand expectations of the industry is weak, PVC futures after short-term sideways finishing, there is a possibility of decline. In 2022, the economy is facing downward pressure, and the overall trend of the domestic commodity market is under pressure. PVC futures will adjust with the trend and the market will recover calm. In 2022, PVC futures moved down in a volatile range, but the center of gravity still fluctuated at a high level in the case of high costs. In 2022, PVC supply and demand will show a weak trend. After a sharp rise and a sharp fall, the market is likely to fall into an interval shock trend. The fluctuation range of the futures price is 7500-9000, and the general direction may be depressed first and then up.

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