The short-term impact of the PVC market is limited

On September 25, the Ministry of Commerce issued an announcement, deciding to conduct anti-dumping investigations on imports of polyvinyl chloride (PVC) originating in the United States from now on
.
This investigation should normally be concluded before September 25, 2021, and can be extended to March 25, 2022 under special circumstances
.
"The anti-dumping investigation initiated by the Ministry of Commerce against U.
S.
PVC can effectively control the import of U.
S.
PVC products
.
However, the current supply of U.
S.
PVC imports is tight, and the import price is about 1,000 yuan higher than domestic PVC (ton price, the same below), and the import window is closed
.
So, in the short term It seems that the anti-dumping investigation has limited impact on the domestic PVC market
.
However, with the resumption of production of PVC parking devices in the United States, the supply of goods increases, which may bring a certain negative impact on the domestic PVC market
.
" Analyst Yu Jiangzhong, a PVC analyst at Zhuochuang Think
.
Effective control of product imports China is a large PVC consumer, accounting for about 40% of the total global consumption
.
In recent years, the proportion of PVC imports in the United States, South Korea, Japan, Russia, and China's Taiwan region has been as high as 80% of China's total PVC imports
.
The scale of PVC imports has grown rapidly, and the price of imported PVC products has continued to drop, which directly suppressed the sales price of similar products in China, resulting in a sharp drop in the profits of PVC companies and even losses
.
In September 2003, the Ministry of Commerce of China imposed anti-dumping duties on imported PVC originating in the United States, Japan and other countries
.
"In 2018, China imported 318,600 tons of PVC from the United States, accounting for 43.
28% of total imports, ranking first
.
On September 29, 2019, the domestic anti-dumping duty was cancelled, and the import arbitrage window opened in the first and second quarters of this year.
Importers and downstream companies have increased their efforts to import PVC from the United States
.
It is worth noting that this year’s PVC import trade mode, general trade accounted for 80%, and in 2019, general trade less than 10%, of which the trade imported from the United States The model has changed the most
.
” said Shi Lei, director of the PVC industry chain of Longzhong Information
.
"In the second quarter, the price of the international PVC market declined
.
From early April to mid-June, the import window continued to open for two and a half months, and global low-price sources poured into the Chinese market, including some American sources
.
In May, there were rumors that the Ministry of Commerce would U.
S.
PVC is conducting anti-dumping investigations.
At the same time, considering that the shipping time from the U.
S.
to China is about 3 months, market participants are very cautious about U.
S.
PVC imports.
Therefore, China's imports of PVC from the U.
S.
are relatively small from May to June; 6 After mid-month, the PVC import window is basically closed
.
" Yu Jiangzhong said
.
The domestic market has little impact.
"The implementation of the anti-dumping investigation on PVC originating in the United States will affect China’s subsequent imports of PVC from the United States
.
At present, although the United States has stopped production due to the hurricane, the PVC installations are gradually recovering, but the supply shortage is still It will last for a period of time
.
International PVC prices have continued to rise, approaching the highest level in history, while domestic PVC prices have been fluctuating between August and September, resulting in a price difference between imported and domestic PVC of about 1,000 yuan
.
With the closing of the import window, the United States It is difficult for PVC to enter the country through general trade
.
" Yu Jiangzhong said
.
It is understood that there are currently two main ways to import PVC in China: one is general trade, and the other is verification
.
Domestic investigations to anti-dumping against PVC in the United States and other countries and Taiwan have been ongoing for 16 years
.
Before the cancellation at the end of September last year, PVC exports from the United States to China were mainly written off
.
Raw materials are imported into China, processed in China, and then exported.
The products are not sold in the domestic market and do not involve tariffs or anti-dumping duties.
Therefore, the anti-dumping investigation will not involve the verification business
.
The import window period may be limited.
"With the recovery of production capacity of PVC plants such as Westlake Chemicals in the United States, the pressure on the international market supply eases, and prices have fallen from high levels
.
In the future, when US imports have a price advantage, it is not ruled out that US sources of goods will flow into the Chinese market.

.
In recent years, including 2021, the domestic production of new PVC production capacity will accelerate, and the demand growth rate is relatively moderate, and the PVC market is expected to weaken
.
Under this expectation, the center of gravity of domestic PVC prices may move downward, lowering the price gap with imported PVC
.
Therefore, even if imported PVC has advantages, the time for the import window to open in a year is relatively limited
.
Now that China is carrying out anti-dumping investigations on American PVC, the American source may no longer have import opportunities
.
"Yu Jiangzhong said
.
Shi Lei introduced that from 2020 to 2021, nearly 1.
6 million tons/year of ethylene process PVC plants in Cangzhou Julong, Gulf Chemical, Wanhua Chemical, Jiaxing Jiahua, and Shanghai Chlor-Alkali are expected to be put into production, and the supply of PVC products is expected.
Will increase significantly
.
If imports are allowed, there will be a large number of ocean-going cargoes originating in the United States, which will increase competition in the domestic market and is not conducive to the optimization of the existing industrial structure
.
In short, the Ministry of Commerce will treat imports of PVC originating in the United States.
Anti-dumping investigations will effectively control imports of PVC from the United States and prevent them from causing substantial damage to domestic enterprises
.