PVC Paste Market Likely to Trend Down Under Pressure in Q4
Preface: Q3 saw the traditional intensive maintenance season of PVC paste. PVC paste prices rose to an annual high backed by tight supply, which was beyond expectations. In Q4, PVC paste supply is likely to increase, while demand may be in the doldrums, so PVC paste prices will possibly trend down under pressure.
In Q3, China’s PVC paste market moved up constantly. Up to September 26, mainstream delivered prices of general material in East China hovered at RMB 8,400-8,900/mt, and the average price was RMB 8,650/mt, up 16.89% from end-June and 8.8% Y-O-Y. Mainstream delivered prices of glove material in North China hovered at RMB 8,500-8,800/mt, and the average price was RMB 8,650/mt, up 17.25% from end-June and 6.79% Y-O-Y.
Taking general material prices in East China as an example, the highest price in Q3 was RMB 8,700/mt in end-September, while the lowest price was RMB 7,500/mt in early-July. The price spread was RMB 1,200/mt. Fundamentals and market sentiments were the main drivers affecting the price increase.
PVC paste supply moved down notably amid intensive unit maintenance.
The newly added 60kt/a PVC paste unit at Jiyuan Jinxiang Material came on stream in Q3, but the spot supply was still tight due to intensive maintenance. PVC paste monthly output shrunk significantly in July and August. The monthly output in July was 67.4kt, reaching a record low in the first three quarters. The PVC paste industrial operating rate and monthly output climbed in September with the restart of maintenance units. Most producers faced no inventory pressure as there were previous orders to be delivered. According to SCI, PVC paste output was 240.68kt in Q3, down 10.98% Q-O-Q and 3.87% Y-O-Y.
The demand for glove material was fairish, while that for general material was tepid in Q3.
Over 90% of China’s PVC glove products were mainly exported. Foreign demand for PVC glove products increased in Q3 due to low product inventory in the foreign market. According to SCI, in late-September, around 550 production lines ran steadily, up around 110 from end-June. Thus, PVC glove product enterprises showed higher demand for feedstock.
Downstream industrial of general material failed to see demand peak season in September. Downstream enterprises stockpiled in July and August amid worries about supply shortage and consumed previous feedstock inventory in September with weaker interest in purchasing.
On the whole, in Q3, glove material demand rose, while general material demand was in the doldrums. Market players tended to replenish stocks caused by tight supply. Thus, PVC paste prices saw a continuous increment in Q3. SCI reckons that fundamentals and costs will possibly be the main price drivers.
PVC paste supply may be high in Q4 affected by limited unit maintenance.
According to SCI, only 80kt/a unit at Tangshan Sanyou Chemical Industries is planned to undergo overhauls in November. It is expected that the PVC paste supply will likely rise notably Q-O-Q.
In Q4, glove material demand may be fairish, while general material demand is likely to weaken.
The foreign demand for PVC glove products should be noticed in Q4. In November and December, NBR glove prices should be concerned. If NBR glove enjoys price advantages, PVC glove product orders will possibly be replaced by NBR glove products. From the perspective of general material demand, the demand for automotive industry-related products may be stable, yet the demand for coating, toys, and leather may shrink.
Calcium carbide prices will possibly hover at lows in Q4.
Calcium carbide prices are predicted to inch down in October amid loose supply. In November and December, calcium carbide prices may rebound slightly due to increased demand. On the whole, SCI reckons that calcium carbide prices will probably hover at lows in Q4, giving limited cost support to the PVC paste market.
In Q4, PVC paste fundamentals may face pressure. At the same time, costs will possibly fail to give strong support to the market. Thus, PVC paste market prices will likely trend down under pressure in Q4.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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