China Printing Ink Resin manufacturer

Anhui Herrman Impex Co., Ltd


September 27, 2021

Energy consumption "dual control" superimposed power limit calcium carbide price increase

In mid-August, the National Development and Reform Commission issued the "Barometer of Completion of Energy Consumption Dual Control Targets in Various Regions in the First Half of 2021", pointing out that many provinces and autonomous regions, including Xinjiang and Ningxia, did not complete their energy control targets and required local governments to adopt Effective measures to ensure the completion of the annual "dual control" target, especially the target task of reducing energy consumption intensity. Not only that, the domestic power supply has been tight recently, and some regions have begun to restrict power supply to enterprises with higher energy consumption.   

Under the combined effect of "dual control" and power curtailment, the national daily output of calcium carbide has been reduced by more than 5,000 tons. As of September 24, the arrival price of calcium carbide in East China reached 6,450 yuan/ton, an increase of 12.66% in the past half month. The price of calcium carbide has risen, and the center of gravity of PVC costs has risen. At present, the production cost of calcium carbide PVC enterprises is around 9,500 yuan/ton, and the cost of some enterprises even exceeds 10,000 yuan. The increase in cost is the most fundamental reason for the sharp rise in the price of PVC in this round.

The current downstream production status of PVC is not good. Large-scale production enterprises can only passively accept high prices and maintain production because they have orders to complete. Small and medium-sized enterprises can hardly afford high costs and are limited by power supply, so most of them operate at low loads. Due to high costs, downstream profile and pipe companies are forced to increase the prices of finished products, which has suppressed demand to a certain extent. At present, the demand is still in the peak season, and most downstream companies insist on production, but the operating conditions are not good and production is difficult to maintain.   

In summary, the PVC market trend is more entangled: the upstream is limited by the shortage of raw materials, and the cost remains high; the downstream demand season is coming to an end, and it is difficult for pipe and profile companies to pass the high cost downward. The short-term market reflects more cost and supply. Until the calcium carbide problem is resolved, demand will have little impact, and the PVC market will maintain a strong pattern.

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