Increase in inventories of Poly Vinyl Chloride in China

On 1^st December, the price of Poly Vinyl Chloride SG-5 in East China was hovering around $1411/ton- $1450/ton. The fluctuation in the price can be seen as the highest price recorded was $2273/ton in the month of October and the drop of 36% is observed if compared with its peak price.

In China, increase in upstream cost prices results in hike in PVC. Downstream market was also affected as buyers are less interested in buying PVC in stock following by decrease in purchase order for building materials. The overall supply of PVC has eased and the operating rate of major PVC plant has rebounded. Inventories of PVC increases in domestic market and the sales pressure increased. As on 26 November, the overall inventories in East and South China were increased by 133% compared to previous year. Due to the limited downstream purchase will, PVC companies has increased their presales by increasing the export order.

Polyvinyl Chloride is a vinyl chain polymer and retains its position among top three polymers, coming as it does after polyethylene and polypropylene as the largest produced synthetic commodity chemical. The global PVC market is mainly driven by its high demand in some of the high-profile industries that includes electrical and electronics, building and construction, automotive, and packaging. China majorly imports around 5.64% from the global market and usually imports from Taiwan, United States and Japan.

According to Chemanalyst, due to background of dual energy control, calcium carbide production is slowing down and supply chain was weak, the PVC production is expected to shift from Calcium Carbide method to ethylene method. It is expected that the spot inventories will continue to accumulate, and prices of Poly Vinyl Chloride will fall. As the winter is approaching, decline in Northern demand will be accelerate which will affect the construction industry and heating in winter may cause shortage of industrial electricity.