Regenerated PVC: mixed ups and downs in the first half of the year, market outlook or wait-and-see shock

来源：本站发布时间：2024-05-08 10:25:31

The first half of 2020 has passed, and for most commodities, it has been a year of ups and downs. However, recycled PVC still maintains its "stable like a rock" characteristics, showing not only a certain degree of resistance to market declines, but also being able to maintain rationality and stable operation during sharp market increases. The following text will gradually unfold the market trend of recycled PVC in the first half of 2020 and the prediction for the second half of the year.

Price statistics for representative specifications of recycled PVC in the first half of 2020

The first half of the year passed away quietly. The external environment in 2020 has undergone great changes. A COVID-19 that began at the end of 2019 has had a great impact on the economic and social life of domestic and global countries. From late January to February, the government proposed measures such as home quarantine and extending the Spring Festival holiday, resulting in a stagnation of trading in most chemical commodities and downstream derivatives markets. After the Spring Festival, in order to control the spread of the epidemic, traffic restrictions were imposed across the country for a period of time, and the return time of migrant workers was gradually delayed. The current epidemic has had a significant impact on the domestic economy. In March, markets in various regions gradually regained popularity, but the global epidemic is raging and developing. As of early June, the number of confirmed cases in Beijing has increased, and strict control measures have been implemented again. Due to the continuous fluctuations of the epidemic and other factors, the slowdown in the economic downturn trend at the end of 2019 was gradually broken, and market supply and demand, investment, consumption, and exports were all greatly impacted, which also had a profound impact on the supply and demand chain of the commodity market.

In the first half of 2020, the performance of the recycled PVC market in terms of hard and soft materials was significantly different. Among them, hard materials showed a slight increase after a long period of strength, while soft particles showed mixed ups and downs. Some particles experienced a long-term stable trend after a decline and then slightly increased, while most particles showed a stable decline and then returned to a stable situation. Below we will conduct a specific analysis.

As of the end of June, in terms of hard materials, the national standard water washed crushing price of white plastic steel was 3800-4000 yuan/ton, an increase of 200 yuan/ton from the beginning of the year and an increase of 200 yuan/ton from the same period last year; The small white pipe mixed crushing material is priced at 3100-3200 yuan/ton, an increase of 100 yuan/ton from the beginning of the year, and an increase of 100 yuan/ton from the same period last year. The price of white button board crushed material was between 1800-2000 yuan/ton, an increase of 100 yuan/ton from the beginning of the year, and an increase of 100 yuan/ton from the same period last year. The increase occurred around mid April, mainly due to the impact of the epidemic, especially in February and March when economic activities were mostly stagnant and there were no demolition activities. As a result, most of the hard wool materials were in short supply. With the gradual resumption of economic activities in April, recycled PVC manufacturers increased their prices and shipments were relatively smooth. Due to strong demand for plastic tiles, the shipment of hard broken tiles on site has been relatively smooth.

In terms of soft materials, white door curtain crushed materials cost 4900 yuan/ton, a decrease of 600 yuan/ton from the beginning of the year and 500 yuan/ton from the same period last year. The decline occurred in early April, mainly due to a large supply of raw materials and a decrease in selling prices. White transparent soft ordinary particles cost 4700-4800 yuan/ton, up 50 yuan/ton from the beginning of the year and 50 yuan/ton from the same period last year. The price of black grade one shoe specific particles is 3000-3100 yuan/ton, a decrease of 600 yuan/ton from the beginning of the year and a decrease of 600 yuan/ton from the same period last year. The main reason for the decline is due to the rampant foreign epidemic, reduced export orders from downstream manufacturers, and little procurement.

From the perspective of manufacturers and market operations: In January, due to the upcoming Spring Festival holiday, it is customary for recycled PVC manufacturers to stop production and increase production. In the first half of the month, terminal manufacturers had a small amount of stock, while in the second half, the trading atmosphere was quiet with few trading activities. 2. In March, due to the impact of the epidemic, most businesses withdrew from the market and watched, with sporadic trading. Due to the fact that workers have not yet returned to work and logistics transportation is obstructed, recycling manufacturers and terminal product manufacturers have low production loads, resulting in poor production and sales. Starting from mid to late March, the recycling factory slowly resumed work, but due to the lack of workers and poor demand, the operating load on the site was low, and the market recovery was slow.

Starting from April, the domestic market has further recovered, with most manufacturers operating normally. In terms of soft particles, only a few regions such as Guangdong were affected by environmental inspections and had low operating loads. In May, some regions such as Huai'an, Jiangsu, suspended operations due to strict environmental inspections. Overall, the supply of soft particles was sufficient, while in terms of hard materials, due to public health incidents and less demolition and construction, the supply of raw materials was tight. Until April, the overall supply of hard crushed materials was tight. In May, with the gradual recovery of raw material supply in some regions such as Nanjing, Jiangsu, the supply of hard crushed materials was still available, but most regions still had a tight supply.

In terms of demand, the demand for hard crushed materials is still acceptable, with strong demand for plastic tiles and smooth on-site transactions; The demand for soft particles is relatively weak, which puts pressure on shipments and puts some inventory pressure on recycling manufacturers.

Forecast for the second half of the year:

The main factors affecting the recycled PVC market in the second half of the year include economic situation, supply and demand, and the trend of new PVC materials.

Economic situation: According to the latest data from the National Bureau of Statistics of China, in May, industrial enterprises above designated size in China achieved a total profit of 582.34 billion yuan, a year-on-year decrease of 4.3% in April and an increase of 6.0%. The profit growth rate changed from negative to positive, achieving the first growth of the year. According to Zhu Hong, a senior statistician at the Industrial Department of the National Bureau of Statistics, the profit growth rate of industrial enterprises above designated size in May changed from negative to positive, which is partly related to the easing of cost increases; On the other hand, changes in industrial product prices have also increased the profitability of enterprises. However, Zhu Hong believes that despite the first increase in profits for industrial enterprises this year in May, market demand remains weak under the impact of the epidemic, and the sustainability of profit recovery needs further observation. Based on data from major economies, data released by the European Commission shows that the economic sentiment indicator for measuring business and household confidence in the Eurozone rose from 67.5 in May to 75.7, marking the largest month on month growth in history. This indicator showed a relatively mild rebound in May. However, the indicator is currently far below the level of 103.4 in February, and epidemic prevention and lockdown measures have been widely implemented around the world since February. This indicator is still below the long-term average of 100, indicating that businesses and households remain pessimistic about the outlook and may remain cautious about spending or investment. According to data released by the National Association of Real Estate Brokers in the United States, the index of completed home contract sales in the United States increased by 44.3% in May, the largest monthly increase since 2001. However, the increase in COVID-19 cases in the United States has brought uncertainty to the market outlook. After the surge of new cases of COVID-19 in the United States, some states in the United States have re implemented restrictive measures. After implementing new restrictions in Texas and Florida, California ordered the closure of bars on Sunday. Washington State and San Francisco have suspended plans to reopen.

Overall, since the second quarter, China's major macroeconomic indicators have shown good signs of recovery. The COVID-19 has entered the third stage, and the gradual recovery of the global economy and the return to normalcy are the main themes of the macro-economy in the second half of the year. The policy cycle has entered a new stage, with leniency in finance becoming the new protagonist, continued efforts in leniency in credit, and fine-tuning of leniency in monetary policy.

In terms of recycled PVC supply: In terms of raw material supply, soft raw materials are currently in normal supply in various regions, while hard raw materials are still in short supply within the region. Some hard materials and raw materials are mostly obtained through demolition. Currently, the epidemic has not ended, so demolition has not been carried out on a large scale in some areas. It is expected that with the gradual control of the epidemic, hard materials and raw materials may gradually become loose in the second half of the year, and hard crushed materials will also gradually increase. 7. The weather in August is hot, and some manufacturers have a higher probability of reducing their production or producing at night. In addition, both central level environmental inspections and regional environmental inspections will have a certain degree of impact on the production of recycled PVC manufacturers, especially in the fourth quarter when air pollution prevention and control will strictly restrict the production of scattered pollutants and other enterprises in the region. The busy autumn harvest season may have an impact in certain regions, but currently, most areas are undergoing mechanized operations, and the impact of the busy season on production is gradually weakening.

In terms of demand for recycled PVC: Hard products are mainly used in construction, decoration and other fields; PVC recycled pellets can be used to produce heavy packaging bags, agricultural water pipes, shoe soles, etc. At present, the domestic and foreign trade environment is gradually improving, and the performance of downstream areas in the short term is flat, with no significant improvement at present.

New PVC: From the perspective of supply and demand fundamentals, the supply of PVC continues to increase in the third and fourth quarters, and there is some pressure on the supply side; On the demand side, demand may slightly decline from a high level in the early third quarter, but demand may start to increase again in the later third quarter. Overall, it is expected that the trend of inventory depletion in the third quarter may continue to slow down, but the fundamental pressure is still not significant. It is expected that the PVC market may rise after a pullback in the third quarter, and the fluctuation range will be enlarged; If several units are put into operation as scheduled in the third quarter, the PVC market will face significant pressure in the fourth quarter, and the market operation will be under pressure. However, it is expected that the overall price center may shift upwards in the second half of the year. The new materials have a certain degree of impact on the high-quality crushing and particle size of recycled PVC. If the continuous increase or decrease exceeds 500 yuan/ton or more, the price of recycled materials may be adjusted to a certain extent.

Overall, the supply and demand of recycled PVC are expected to have a strong impact on the future market. It is expected that recycled PVC will show a stable, medium, and narrow market situation in the third quarter. In the fourth quarter, the market is expected to remain strong due to factors such as reduced supply and demand support.

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