Analysis of the main reasons for the sharp decline

2022-08-26
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Analysis of the main reasons for the recent sharp decline in PVC prices

the sharp decline in crude oil prices has led to a sharp decline in crude oil export revenue, which has a greater impact on oil producing countries with relatively single economic structure. At present, OPEC's crude oil output is about 30million barrels/day, accounting for about 1/3 of the global output, of which Saudi Arabia, the world's largest oil producer, accounts for more than 40% of GDP; Russia's crude oil production is about 10million barrels per day, accounting for about 1/9 of the global production. The decline of crude oil will have a direct impact on the economy of OPEC and Russia. We believe that crude oil exporting countries represented by Saudi Arabia and Russia can hardly tolerate low oil prices for a long time. It is only a matter of time before oil producing countries improve the imbalance between supply and demand of crude oil by reducing production in the later stage. Based on this judgment, we believe that the use of crude oil will not be affected until the critical moment, and the downward space is limited. The bottoming of WTI crude oil near $50/barrel is a probability event

with the stabilization of crude oil price, the main factor affecting PVC price will return to the level of supply and demand from the cost collapse (ethylene method) driven by the previous decline in crude oil. Considering that it is currently the peak consumption season of PVC, we believe that the probability of PVC bottoming rebound in March is high

some people believe that with the stabilization of crude oil prices, supply and demand will become the main factor affecting PVC prices. As the downstream PVC pipes and real estate industry enter the peak season of construction, the price of PVC is expected to start a periodic rebound, and multiple orders can be arranged on the front line with 5000 yuan/ton

from July 2014 to January 2015, the price of PVC fell sharply, with a decline of about 20%. It is true that at present (1) there is overcapacity in the PVC industry along the direction of the contact surface between the fiber and the matrix, but the imbalance between supply and demand has always existed and has not further deteriorated. We believe that overcapacity is not the main reason for the sharp decline in PVC prices this round

PVC in China is mainly produced by coal chemical industry (calcium carbide method), and the decline of crude oil price will not have a direct impact on the price of calcium carbide PVC. However, last year, PVC and crude oil fell at a highly consistent time node, and there seems to be some correlation? After analysis, we found that the correlation between crude oil price and PVC price was -0.1837 in the five years from the listing on May 26, 2009 to June 30, 2014. From a statistical point of view, there was basically no correlation. However, since July 2014, Correlation between crude oil and PVC Jinan new era Gold Testing Instrument Co., Ltd. the functional torque tester is as high as 0.9635 as a precision instrument. When crude oil operates in the high price area, the rise and fall of price will not change the current situation that the cost of ethylene method is much higher than that of calcium carbide method, so the rise and fall of crude oil price has little impact on PVC. However, when the price of crude oil is lower than a certain threshold, calcium carbide method has no cost advantage over ethylene method. In order to ensure demand, calcium carbide method is forced to reduce the price, so PVC is highly related to the operation trend of crude oil

with the stabilization of crude oil prices, the cost of ethylene PVC has limited downward space, and supply and demand will again become the main factor affecting the price of PVC. In view of the peak consumption season of PVC from March to August, we believe that the bottom of PVC has appeared, and we can try the strategy of bargain hunting

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