September 8, 2021，the intraday price of the main PVC futures contract exceeded 10,000 yuan/ton, with a maximum increase of over 4%, and fell back to an increase of 2.08% at the close, and the closing price hit a record high since the contract was listed. At the same time, PVC spot market prices also hit a record high. In this regard, a reporter from the Financial Association learned from industry insiders that leading PVC companies have maintained full capacity production. In the second half of the year, with the high price of PVC, corporate profits were considerable. In the secondary market, the share prices of many PVC companies have doubled since the beginning of the year, and their performance in the first half of the year also increased significantly.
PVC prices hit a record high
Longzhong Information monitoring data shows that taking East China as an example, the average price of SG-5 PVC in East China was 8,585 yuan/ton from early January to June 30, 2021, an increase of 40.28% from the same period last year. Since the second half of the year, prices have fluctuated upwards. The average spot price on September 8 was 9915 yuan/ton, a record high. The price increased by 50.68% compared with the same period last year.
Source Longzhong Information Source Longzhong Information
It is reported that there are two main factors that support the sharp rise in PVC prices: First, global PVC demand has maintained a steady growth, but the North American cold wave in the first quarter of this year affected the US PVC production capacity, and my country’s PVC exports in the first half of the year increased significantly year-on-year. In 2021 In the first half of the year, the total domestic export of PVC powder was 1.102 million tons, a year-on-year increase of 347.97%. Second, Inner Mongolia and Ningxia are the main production areas of calcium carbide for PVC raw materials. The two provinces’ energy consumption dual control policy has led to a decline in the operating rate of calcium carbide installations and an overall shortage of calcium carbide supply. , The price of calcium carbide has risen, pushing up the production cost of PVC.
Longzhong Information PVC industry analyst Shi Lei told the Cailian News that too much PVC increase is not a good thing for the industry. The price cost needs to be transmitted and digested. The downstream cost pressure is too large, and it is not known whether the increase can be digested. It was originally the traditional peak season for the domestic PVC industry in the near future, but under the current price and cost suppression, the downstream performance is not good, and orders are forced to shift backward or decrease in the short term. At the same time, as many PVC companies concentrated on maintenance in August and September, according to monitoring, the overall operating rate of the PVC industry has dropped to 70%, which is the lowest point for the year.
Related listed companies have substantial profits in the second half of the year
Regarding the future price trend, Shi Lei told the Cailian News Agency that, excluding factors such as natural disasters, epidemics, and international freight logistics, the domestic PVC market price is affected by downstream resistance and can fully self-regulate without the support of rising demand, and PVC companies After the overhaul is completed and the market supply increases, the operating rate will be maintained at a high level. However, under the support of high costs, PVC prices have no room for a significant drop. “I judge that with changes in demand, PVC prices are expected to fluctuate at a high level in the second half of the year.”
The judgment that the price of PVC will fluctuate at a high level has also been recognized by practitioners. An insider from a listed company in the PVC industry told the Cailian Press that as overseas PVC installations continue to recover and domestic manufacturers continue to complete maintenance during the year, subsequent supply is expected to be relatively stable. In addition, the downstream is resistant to high-priced raw materials, and the enthusiasm for purchasing is low. However, under the support of calcium carbide prices, it is expected that PVC prices will fall in the second half of the year and will fluctuate at a high level. The company is optimistic about the prosperity of the PVC industry in the second half of the year.
The price increase of PVC has been reflected in the stock price and performance of related listed companies.
Zhongtai Chemical (17.240, 0.13, 0.76%) (002092.SZ) is a leading company in the domestic PVC industry, with a PVC production capacity of 1.83 million tons/year; Junzheng Group (6.390, 0.15, 2.40%) (601216.SH) owns PVC The production capacity is 800,000 tons; Hongda Xingye (6.430, 0.11, 1.74%) (002002.SZ) has an existing PVC production capacity of 1.1 million tons/year (400,000 tons/year project will reach production by the end of next year); Xinjiang Tianye ( 12.060, 0.50, 4.33%) (600075.SH) has 650,000 tons of PVC production capacity; Yangmei Chemical (6.140, 0.07, 1.15%) (600691.SH) and Inlet (16.730, 0.59, 3.66%) (000635.SZ) ) Respectively owns PVC production capacity of 300,000 tons/year and 260,000 tons/year.
On September 8, Zhongtai Chemical, Inlite and Yangmei Chemical had their daily limit. Since the beginning of this year, Zhongtai Chemical’s share price has risen by more than 150%, followed by Hongda Xingye, Yangmei Chemical, Inlet and Xinjiang Tianye (600075. SH), the stock price rose more than 1 times.
In terms of performance, Zhongtai Chemical’s net profit attributable to the parent in the first half of the year increased by more than 7 times; Inlite and Xinjinlu (7.580, 0.34, 4.70%) in the first half of the year, about 70% of the revenue came from PVC resin, and the net profit attributable to the parent The growth rates were 1794.64% and 275.58% respectively; more than 60% of Hongda Xingye’s revenue came from PVC, and the company’s net profit attributable to the parent increased by 138.39% in the first half of the year.
The reporter from the Financial Associated Press noticed that among the factors of the performance growth of listed companies in the PVC industry, the sales volume increased less, mainly due to the increase in the price of PVC.
The above-mentioned persons from the listed companies in the PVC industry told the Cailian News that the leading companies in the PVC industry have always been producing at full capacity. The increase in PVC prices has guaranteed the company’s performance in the second half of the year, and the company has considerable profit margins.
Calcium carbide method PK ethylene method
It is reported that the current domestic PVC production capacity adopts the calcium carbide process and the ethylene process in a ratio of about 8: 2, and most of the listed companies produce PVC products based on the calcium carbide process.
The staff of Junzheng Group’s securities department told reporters that the company has a low-cost competitive advantage. Relying on local rich resources, the company’s main raw materials are purchased as close as possible, and the company’s production of electricity, calcium carbide, and white ash are basically self-sufficient. .
According to a reporter from the Financial Associated Press, most of the listed companies that use the calcium carbide method to produce PVC products are equipped with calcium carbide production capacity, and these calcium carbide production capacity is mainly self-produced and used, and independent export is generally less.
Shi Lei told the Cailian News Agency that nearly 70% of my country’s PVC companies are concentrated in the western region. Because of the concentration of local industrial parks, the raw materials such as electricity, coal, calcium carbide, and liquid chlorine are abundant, and the raw materials are less affected and have cost advantages. The remaining 30% of PVC companies in the central and eastern regions need to source calcium carbide from outside. Currently, the price of calcium carbide in Shandong has doubled compared to the beginning of the year.
According to his calculations, the proportion of calcium carbide in the cost of PVC production has risen from about 60% before to about 80% at present. This has led to great cost pressures for PVC companies in the central and eastern regions that purchase calcium carbide, and at the same time, the supply of calcium carbide has also increased. The competition pressure of outsourcing calcium carbide PVC enterprises has restricted the operating rate.
In Shi Lei’s view, the ethylene process has a large future development space. In the future, the new capacity in the PVC industry will mainly be the ethylene process. With market adjustments, calcium carbide process companies will withdraw from their production capacity without cost advantages.
According to statistics, listed companies that use the ethylene process to produce PVC include Yangmei Hengtong, a subsidiary of Yangmei Chemical (600691.SH), which has 300,000 tons/year ethylene process PVC production capacity, and Wanhua Chemical (110.610, -1.61, -1.43%) (600309.SH) 400,000 tons/year, Jiahua Energy (13.580, -0.30, -2.16%) (600273.SH) 300,000 tons/year, chlor-alkali chemical industry (18.200, 0.32, 1.79%) (600618.SH) The current production capacity is 60,000 tons/year.
Post time: Sep-16-2021