China PVC resin pricel:First up and then down in the first half of the year

In the first half of the year, under the influence of strong expectations and weak reality, PVC prices rose first and then fell.  In the second half of the year, with the stabilization of the economy and the enhancement of cost support, PVC fundamentals are likely to improve, but the demand recovery strength is uncertain, and the overall price is expected to be weak and mainly shaken.

PVC prices rose first and then fell in the first half of the year

In the first half of 2022, the overall price of PVC market showed a trend of rising first and then falling, with the price center gradually moving up in the first quarter and falling continuously in the second quarter.  For example, in east China market, the average price of SG-5 in the first half of 2022 is 8737 yuan/ton, up 183 yuan/ton compared with the first half of 2021, or 2.14%.  The highest price was 9417 yuan/ton in early April, and the lowest price was 7360 yuan/ton at the end of June. The overall fluctuation range was more than 2000 yuan/ton.

April 1 – PVC month average price is still running in the past more than five annual average price range of the peak, on the one hand, from the cost side, on the other hand the market from last year’s historic peaks, industries are not obviously break the cycle, the third market steady growth in trading strong expectations and crude oil prices rose, but the price of 5 – June fell back quickly,  The monthly average price also continued to fall, weak reality leads to the gradual loss of market confidence, market participants on the industry’s cognition began to turn to the downturn cycle.

In the first half of the year, THE trend of PVC futures and spot is consistent, but the spot as a whole shows the characteristics of weak peak season and weak off-season. The demand is obviously worse than in previous years, so this year’s base is significantly lower than in previous years.  Take East China SG-5 as an example, the average base error in the first half of 2022 is 58 yuan/ton, 107 yuan/ton less than 165 yuan/ton in the first half of 2021.  The maximum base difference in the first half of the year was 239 yuan/ton at the end of April, and the minimum was -149 yuan/ton in the middle of February.

From the perspective of driving factors, the PVC market trend in the first half of the year can be divided into two stages. The first stage is the first quarter, which is mainly driven by stable growth and surging crude oil price.  The second phase was the second quarter, when the market moved from trading expectations to trading reality, driven by weak demand and aggressive fed rate hikes.

Post time: Jul-08-2022