Stock Name: Xinzhongde Stock Code: 430683
Amid the wild swings in crude oil prices, is PVC simply at the mercy of futures markets?
发布时间：2022-03-29
Recently, international crude oil has been affected by "Ukraine-Russia conflict" drives prices to historic highs. On March 7, international crude oil futures surged sharply, with Brent crude reaching as high as $139 per barrel during trading—its highest level since 2008. Meanwhile, the main contract for U.S. WTI crude oil settled at $119.4 per barrel, up 3.2%, while the benchmark Brent crude contract closed at $123.21 per barrel, gaining 4.3%. However, by March 9, global oil prices plummeted dramatically. The main U.S. WTI crude oil contract ended the day at $108.70 per barrel, a drop of 12.1%, while the Brent crude contract settled at $111.14 per barrel, falling by 13.2%. As oil prices experienced extreme volatility, commodities like PVC once again saw a sharp rally in their futures markets. Driven by both futures and energy dynamics, spot prices for these commodities also began to fluctuate significantly. Since the start of 2022, the PVC market has repeatedly swung between dramatic price surges and steep declines, generally remaining range-bound within the 8,000–9,400 yuan/ton bracket.
In early March, the surge in crude oil prices—driven by the Russia-Ukraine conflict—spurred a sharp rally in commodity futures such as PVC. Backed by strong performance in futures markets and energy sectors, PVC prices soared continuously, posting an impressive gain of 8.83%. However, as concerns about crude oil supply eased slightly and oil prices edged lower, PVC futures initially rallied before reversing course, pulling spot PVC market prices downward as well. Meanwhile, with the ongoing spread of COVID-19 domestically—leading to lockdowns and isolation measures in several regions and provinces—downstream demand expectations weakened, further contributing to an overall bearish adjustment in PVC prices. Currently, both bullish and bearish sentiments coexist within the market, leaving numerous uncertainties. As a result, the future trajectory of PVC remains unclear. Let’s now analyze this situation from several angles one by one!
Upstream, electric calcium carbide production facilities in the northwest region are operating steadily, ensuring a normal supply of carbide. However, in some areas, shipping and transportation have been disrupted due to pandemic-related disruptions. PVC manufacturers are experiencing uneven regional availability, with some areas facing supply shortages, while calcium carbide procurement prices have risen. In the short term, calcium carbide prices remain high, and cost pressures continue to provide support.
Supply, after the Spring Festival PVC production companies have seen their operating rates steadily increasing. In March, few PVC plants underwent maintenance—only a handful of facilities remained below full capacity due to cost constraints or internal operational issues. As of March 18, the average operating rate among PVC producers had rebounded to 82.39%. Going forward, with more units expected to resume operations, output levels are likely to rise further. However, it’s important to keep an eye on planned maintenance activities at PVC plants.
Crude oil, PVC, enterprises, prices, facilities, U.S. dollars, futures, March, calcium carbide, production
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