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Analysis of China is PVC production and imports
such factors as anticipated growth of demand and supports of local governments stimulated the domestic PVC rapid expansion of industry capacity, in the last year, production capacity has clearly excessive cases, at present the increase of production capacity still does not appear to be to curb the trend Analysts said the large number of surplus domestic supply, while the influx of imported products is also coming, the industry is operating rate is only 50% and exports can not be optimistic about the future, there may be some enterprises will be eliminated, the proposed entry threshold and environmental protection industries Tisheng standards, especially for the expansion project Suddenly developenment of the western region Galaxy Futures data provided by the domestic PVC production capacity is only 5.23 million tons in 2003 but in 2008 which has increased substantially to 15.81 million tons. 2008 apparent consumption of domestic PVC was only 9.27 million tons, 6.54 million tons appears surplus production capacity. Since 2009, PVC industry is increasing production capacity. Ping media Shenma in September will increase by 30 million tons, Shaanxi, north end of the year will increase by 200,000 tons per Xinjiang China and Thailand will increase by 1.95 million tons. Du Yingting PVC industry analysts said, is expected to supply in 2009 reached 16.745 million tons, apparent consumption reached 10.64 million tons, overcapacity situation is very grim. There are also some 10 years, 11 years of production projects, future production will continue to grow. South Korea is Hanwha is 300,000 tons estimated to be completed in 10 years, Anhui HuaSu of 1 million tons estimated production in 11 years in May. Analysts said that the domestic PVC production capacity expansion and the expected future demand growth, in particular in real estate investment growth on PVC demand pull, but the current expansion of production capacity characteristics shown surrounded them, has clearly exceeded the demand. In addition, more deep reason for economic growth and the local government to solve the employment and other reasons Shifen Zhichizhelei business development, Ruyi lower the Jiage transfer Tude, which was felt in the Xi Bu Area, Ye Dao Zhi PVC capacity expansion reflects the focus in Inner Mongolia, Xinjiang, Ningxia and other coal-rich western region features Analysts said the production of 1 ton of PVC consumes 8000 kWh, the expansion of calcium carbide process PVC project focused on the integration of production, the cost of electricity is much lower than in the east, which is the expansion of the project site would be a reason in the west. Bohai Securities Research report, calcium carbide calcium carbide process PVC accounts for 72% of the cost, the cost of calcium carbide and coke composition of electricity together account for 90%. More important reason is the support of local governments. Duying Ting said the price is relatively low PVC 3,4 month is time, the enterprises are difficult to recover costs, but parts of the tax cuts and other measures taken for these corporations to maintain a high starting rate. East PVC capacity expansion, despite the situation, as some companies move into the industrial park from the city after the expansion of production capacity, but there are some enterprises have gradually abandoned the PVC business, such as the country shares. PVC eastern province of Shandong has also been limited production capacity, according to the province is Eleventh Five Year Plan, PVC production capacity expanded basic will not. Severe export situation As the industry overcapacity, China Chlor-Alkali Industry Association estimates is expected to start in 2009 was 50%, idle enterprises will reach 17. Growth in imports, exports adverse circumstances overcapacity become more pronounced. Fellow of the original static Galaxy Futures, said the first half of the lower crude oil prices led to lower international prices of PVC, PVC has a price advantage of imports. 1-7 months, PVC imports has been greater than exports; imports has been an increase, while exports will have been down. Exports, analysts said, the international general production process is ethylene, calcium carbide process PVC products require expensive 400-500 yuan / ton to export, while Europe and the United States and other countries between Chinese products, environmental protection, energy saving, low-carbon and other characteristics, products into these markets is very difficult, future exports of resistance encountered in this area will be more. In addition, calcium carbide business just west of the higher oil prices and under the conditions of existence of local subsidies have cost advantages. Despite the oil price is expected to be higher, but the need for vigilance in the Middle East low-cost natural gas to ethylene, which will greatly reduce the production of PVC reduces the cost of ethylene, the future expansion of production scale on the calcium carbide process will lead to a greater impact, making calcium carbide process loss of cost advantage. In order to promote the healthy development of the industry, analysts believe that companies should be increased barriers to entry and environmental standards and other requirements, in particular the expansion of the project, inhibition of blind expansion of production capacity. Through the government closed down backward production methods may be more difficult, need to phase out backward through market competition.
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