Main factors affecting the market price of PVC

（1） Impact of upstream raw materials

At present, the domestic PVC manufacturing process is still dominated by calcium carbide method. Since the second half of 2008. Benefiting from the low-level operation of international crude oil, the production cost of ethylene PVC manufacturing process in the world is low. Due to the limited production and price protection of coal, the cost of calcium carbide has always been high compared with ethylene PVC, resulting in the disadvantage of domestic PVC production enterprises. With the impact of meager production profits and foreign sources, with the recovery of crude oil price, The cost advantage of domestic chlor alkali enterprises appears again. The production cost of PVC is mainly the cost price of coal, coke, electricity, calcium carbide, crude oil, ethylene and VCM. In addition, the price of raw salt will also have a certain impact on the price of PVC through the value transmission of chlorine.

(1) Coal, coke, electricity

As China's industrial power is still dominated by thermal power generation, and coke mainly comes from coal, the prices of the three are basically bound, so we will make a unified analysis here. According to the preparation cost of PVC by calcium carbide method, the power consumption of 1 ton of PVC is about 7000 degrees, the coal consumption is about 3 tons, and the energy cost accounts for more than 50% of the production cost. Therefore, the price fluctuation of coal, coke, electricity and other energy will directly affect the market price of PVC.

(2) Crude oil, ethylene, vinyl chloride, dichloroethane

Worldwide, PVC production is still dominated by ethylene process. Under the impact of the global financial crisis triggered by the subprime mortgage crisis, the price of crude oil has fallen from US $148 / barrel to US $45 / barrel. With the decline of crude oil price and the expiration of China's foreign anti-dumping, imports have begun to impact the domestic market.

At present, the crude oil price is generally maintained in the range of USD 30 ~ 50 / barrel. The decline of crude oil price makes the cost advantage of manufacturing PVC with ethylene as raw material obvious. The prices of crude oil, ethylene and imported vinyl chloride (VCM) and dichloroethane (EDC) will also directly affect the price trend of PVC. In addition, China only implements anti-dumping on foreign PVC, but does not implement protection policies on VCM and EDC. Some domestic PVC manufacturers may directly buy VCM poly synthetic PVC from abroad at a large number of low prices. Therefore, the price of upstream products such as crude oil and VCM will have a direct impact on the price of domestic PVC.

(3) Raw salt


The main consumption field of raw salt is the production of chlor alkali products. The chlorine generated after electrolysis of raw salt is used to produce PVC and other chlorine products, and the sodium part is used to produce soda ash and caustic soda. Although chlorine is not a major factor in the production cost of PVC, sodium is the main cost of caustic soda and soda ash. Therefore, the price of raw salt will directly affect the price of alkali products and the market demand for alkali products. There is a chlor alkali balance between PVC and alkali, which indirectly affects the supply of PVC and its price trend.


（2） Factors affecting downstream demand of PVC


(1) Real estate industry

From the development stage of the industry, PVC has entered a mature stage and has obvious buyer's market characteristics. Therefore, the impact of downstream demand on commodity prices is particularly important at this stage. The largest consumption field of PVC is profiles, profiles and pipes, which are mainly used in the construction field, so. The future development trend of the domestic real estate market will play a decisive role in the demand for PVC. In addition, China is currently in the process of urbanization, and some infrastructure investment will also stimulate the consumption of PVC.

(2) Domestic economic trend

According to the analysis, the growth rate of GDP has an important impact on the price of PVC, and the future domestic economic trend will directly affect the price of PVC. For example, in 2008, in order to deal with the impact of the international financial crisis, the Chinese government implemented a 4 trillion economic stimulus plan, mainly invested in infrastructure and agricultural construction, causing PVC demand. The current urbanization may stimulate the digestion capacity of PVC market.

(3) Export of plastic products

In addition to profile pipes, PVC is also widely used in plastic containers, packaging of toys and other products and daily necessities (such as rubber shoes, soles, ponchos and sporting goods). According to statistics, China exports 6.8 billion pairs of shoes every year, and 50% of household appliances are exported. The export of these plastic products will also have a certain impact on the demand for PVC.

（3） Impact of national policies

(1) Petrochemical industry revitalization plan

In 2015, the State Council adopted the plan for the adjustment and revitalization of petrochemical industry and light industry, decided to increase credit support for petrochemical enterprises, stop approving coal chemical projects such as coke and calcium carbide that simply expand production capacity, accelerate structural adjustment and optimize industrial layout. Limit coal chemical industry, support crude oil petrochemical industry, and limit small enterprises with production capacity, trying to have a certain impact on China's PVC production structure, so as to enhance the upgrading of domestic PVC production capacity.

(2) Implementation of environmental protection law

The new environmental protection law has been implemented since January 1, 2015, which is known as the strictest environmental protection law in history. There are three stricts in the newly revised environmental protection law: first, stricter requirements for enterprises, especially the strict measures of "daily punishment" for the first time, will give polluting enterprises the largest illegal cost they have ever had; Second, the requirements for local governments are stricter, and it is clear that environmental protection is directly linked to cadre evaluation; Third, the requirements for regulatory authorities are stricter, and nine kinds of dereliction of duty are listed. It also stipulates strict administrative accountability measures. Chlor alkali industry is an industry with high energy consumption and high pollution. With the continuous increase of local environmental protection policies, chlor alkali enterprises continue to increase environmental protection investment, and more and more self owned power plants carry out desulfurization and denitration technical transformation. the implementation of environmental protection law will affect the change of PVC production pattern.

(3) Export tax rebate rate and export restriction processing trade

In 2007, China directly reduced the export tax rebate rate of PVC from 11% to 5%. In 2010, the Ministry of Finance and the State Administration of Taxation announced the "notice on canceling the export tax rebate of some commodities". From July 15, 2010, the export tax rebate of 406 commodities was cancelled. On October 25, 2018, the website of the Ministry of Finance announced the "notice on adjusting the export tax rebate rate of some products", which involves many commodities such as photo paper, plastic products and lamps. PVC related products include PVC powder, PVC paste, PVC pipe, PVC profile