Different production processes are the key to determining the differentiated development of China’s chemical industry and the main driving force for chemical upgrading. Producers can improve their own competitiveness level through the differentiation of different production processes, thus realizing all-round competition.
PVC currently has two production processes, namely the ethylene method and the calcium carbide method. Ethylene method is ethylene and chlorine made into dichloroethylene, and then polymerized to produce PVC, while the calcium carbide method refers to the use of calcium carbide production of acetylene, and then the production of vinyl chloride polymerization to PVC. In addition, there are salt chemical by-products of chlorine to the process of PVC, due to the small size of the market in this part, this article does not make a comparison.
According to the price trend measurement from 2009 to mid-2023, in the past 14 years, China’s ethylene PVC production profit fluctuations exist in the following pattern:
First, in the past 14 years, ethylene-based PVC most of the time in a state of profit, a few times in the loss, of which the maximum loss reached 1001 yuan / ton, the maximum level of profitability at 3,149 yuan / ton. In the past 14 years, the average profitability of ethylene method PVC is in the range of $655/ton.
Second, the profitability margin is the largest in 2021 at $3,149/tonne, with the largest loss occurring in 2015. the sharp rise in crude oil prices from 2021 to 2022 drives chemical prices higher, resulting in the highest profitability for the ethylene method.
Third, there is trend consistency between ethylene and PVC prices over a long period of the last 14 years, but the two do not fit well in the data. Among them, there is a forward-looking ethylene price volatility, and ethylene price volatility has a trend effect on PVC and ethylene method profit volatility.
According to the price trend measurement from 2009 to mid-2023, in the past 14 years, China’s calcium carbide PVC production profit fluctuations exist in the following pattern:
First, calcium carbide PVC profits in the past 14 years most of the time in a profitable state, and the profitability of space is relatively stable, mostly concentrated in the vicinity of 700 yuan / ton. In the past 14 years, the average profit level of calcium carbide PVC was 545 yuan/ton.
Secondly, the price of calcium carbide reached a historical high in 2021, which also led to its calcium carbide PVC profit in 2021, resulting in a significant loss of calcium carbide PVC in 2022.
Third, the price fluctuations of calcium carbide and PVC in the past few years there is consistency, the fit of the two data reached 90% and above, in which the price fluctuations of calcium carbide has a certain trend, and the price fluctuations of PVC follow the price of calcium carbide and fluctuations.
From the point of view of profit fluctuations in the past 14 years, China’s ethylene and calcium carbide PVC profit fluctuations in the general direction of consistency, but the extent of the impact of raw materials on profits there is a large deviation. According to the main raw materials in the past 14 years on the cost of the proportion of the view, you can see the following pattern:
First, in the ethylene method of PVC, the past 14 years, ethylene for the ethylene method of PVC cost accounted for 60% and above, the average value of 64.1%, is among the factors that have the greatest impact on the cost weight. It can be seen that ethylene has a huge impact on the cost of PVC, ethylene price fluctuations, directly determines the cost of PVC fluctuations. Ethylene as a variable of ethylene cost impact factors, subject to CFR Northeast Asia ethylene price fluctuations, China’s market discourse is weak.
Secondly, the influence of chlorine gas on ethylene-based PVC is gradually weakening, with an average share of about 4% in the past 14 years, which has almost no impact on the cost of ethylene-based PVC. Moreover, if the chlorine gas is the by-product of the former chlor-alkali plant, its cost can be ignored, and the price change of chlorine gas will not have any impact on ethylene PVC.
As for the variable factors affecting the cost of calcium carbide PVC, the biggest cost is calcium carbide. According to the past 14 years of calcium carbide cost for the cost share of PVC, the average value of 75.5%, is the largest cost share of factors, but also the largest impact of the proportion of factors. Fluctuations in the price of calcium carbide, directly affecting the cost of calcium carbide PVC, thus bringing a direct impact on the market price of PVC.
If the enterprise is equipped with its own calcium carbide, then the cost can be further reduced. If the enterprise is purchasing calcium carbide, the fluctuation of the price of calcium carbide is the main consideration of the enterprise. In addition, the price of calcium carbide is mainly affected by national energy control and market supply and demand, Chinese enterprises have the right to independent pricing.
Future PVC projects proposed in the scale of more than 2.2 million tons / year, will be put into production in 2024-2025. In the proposed project, half for the premise of the planning of the calcium carbide method, a total capacity of 1.1 million tons / year, while the proposed ethylene method in the capacity has reached 1.1 million tons / year. According to incomplete statistics, the future of calcium carbide method of PVC production capacity accounted for the proportion of the large head, accounting for about 75% of the total PVC production capacity and above. Therefore, the future fluctuations in the price of calcium carbide, will directly bring the impact of PVC costs, which leads to different process routes under the PVC price changes.
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