China PVC Paste Prices Went Down in 2023
Preface: In 2023, the PVC paste industrial operating rate reached the second 5-year high. PVC paste export orders hit a record high, but China’s domestic consumption was tepid. PVC paste prices fluctuated downward amid supply-demand pressure. In 2024, the average price of PVC paste may change narrowly compared with 2023. The PVC paste market may still face supply pressure. Export orders are likely to be fairish, while the domestic consumption recovery should be noticed.
In 2023, the PVC paste industry saw a notable supply-demand pressure. First, as the industrial operating rate was high, the output rose. Second, downstream demand was in the doldrums. Therefore, PVC paste prices went down.
PVC paste prices moved down, dragging down the profit.
In 2023, China’s PVC paste prices first fluctuated downward then rose and then fell. The market price fluctuated downward in H1 and rebounded in Q3 and fell in Q4. The highest price was RMB 8,675/mt in mid-September, while the lowest one was RMB 7,175/mt in end-June. The average price was RMB 7,835/mt, down 15.45% Y-O-Y. Therein, the average price of general materials was RMB 7,803/mt, down 15.41% Y-O-Y, and that of glove materials was RMB 7,867/mt, down 15.49% Y-O-Y. Changes in supply, demand and costs were the main reasons for price fluctuations.
In 2023, the drop rate of calcium carbide prices overpassed that of PVC paste prices, so the profit from producing PVC paste turned from negative to positive. In Q4, calcium carbide prices inched up, while PVC paste prices dropped, so the PVC paste market faced profit losses again. From January to July, the profit was negative. In July and August, PVC paste prices rose notably amid brief supply-demand fundamentals improvement. From August, the profit turned positive. However, from mid-November, the profit turned negative again.
The average gross profit at PVC paste producers in Hebei who purchased calcium carbide outside was RMB -422/mt, down RMB 149/mt Y-O-Y. The highest profit was RMB 608/mt in mid-October, while the lowest one was RMB -1,698/mt in early January.
The capacity utilization rate rose notably.
In 2023, China’s PVC paste capacity was 1495kt/a, down 2.61% Y-O-Y, while the output rose to 1,069kt. The capacity utilization rate is estimated to be 71.55%.
PVC paste export volume hit a record high in 2023.
The export volume of China’s PVC paste was 146.7kt, up 38.53% M-O-M, and the export dependence degree was 13.72%. The average monthly export volume was 12.2kt, which was notably higher than that in 2022. Resources exported to Europe remained high in 2023. In 2023, 84.6kt PVC paste resources were exported to Russia, accounting for 57.68% of the total and ranking first. 21kt resources were exported to India, up 9.1kt or 77% Y-O-Y, ranking second.
In 2024, PVC paste prices may change narrowly compared with 2023.
No newly added units in 2024 have been heard. However, the PVC paste market may still face supply pressure. In H1, 2023, the demand for glove materials improved. Foreign demand for glove products in 2024 should be concerned. The demand from the wallpaper and leather industries is expected to weaken. The recovery in the PVC paste demand will likely be limited. In 2024, PVC paste prices may change narrowly compared with 2023.
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