In May, PVC exports decreased slightly month on month, but the quantity remained at a high level

Introduction

In May, the PVC export data were released. The export volume remained at a high level. In the short term, the export arbitrage window continued to open, and the export quantity to be delivered was still too much. It is expected that the export volume will still be high from June to July. However, with the advent of the off-season in Southeast Asia and India, the export volume may turn worse month on month.

The export fell slightly month on month and remained high as a whole

The export data of PVC in May was in line with the expectation, and the export volume remained high. According to the customs data, the export volume of PVC in May reached 266000 tons, a slight decrease of 4.44% on a month on month basis and a year-on-year increase of 23.03%.

From January to may, PVC exports totaled 1088900 tons, with a cumulative year-on-year increase of 4.76%.

Export destinations are concentrated in India, Vietnam, Central Asia, the Middle East, Africa and other regions. These are China's traditional export destinations, of which India and Vietnam account for the highest proportion, accounting for 52% together.

The number of domestic PVC powder exported to India remained high, mainly because India's anti-dumping policy on China's PVC expired on February 19, 2022, and China's advantage in exporting PVC powder to India increased. In addition, PVC powder was exported to Central Asia, Turkey and the United Arab Emirates in May.

Export prices fall back, but domestic prices still have advantages

Although the international market price peaked in April and fell continuously, the domestic market price fell synchronously, and the export arbitrage window continued to open. Only at the end of April, the export arbitrage window closed briefly.

Due to the sluggish domestic demand, there is a certain pressure on domestic enterprises to ship goods. Therefore, enterprises with export qualifications have chosen export as an important means to alleviate the sales pressure. Therefore, although the export profit is not rich, and the foreign demand is gradually weakening, the domestic supply side has a high enthusiasm for export, and the overall export remains at a high level.

In the later stage, the export may weaken but remain at a relatively high level

From May to June, the PVC export arbitrage window continued to open, and the export to be delivered remained above 200000 tons. Due to the lag of export delivery for about one month, the export volume from June to July will remain at a high level, and it is expected that the export volume in a single month will still be above 200000 tons.

Due to the gradual weakening of foreign demand, China's main export destinations, India and Southeast Asia, will gradually enter the off-season due to the impact of the rainy season. Historical export data can also prove this. It can be seen from Figure 1 that the export volume from July to September of each year is at a relatively low level, and it will increase again in October.

In addition, as the inflation pressure in the United States has greatly increased, the Federal Reserve has gradually raised interest rates aggressively, and the return of US dollars has accelerated, which has increased its impact on the economies of developing countries. While China's PVC export destinations are basically all developing countries, the later economic downward pressure may also affect foreign demand.

Therefore, on the whole, the export volume will remain high in the short term. However, with the advent of the off-season and the increasing downward pressure on emerging economies caused by the Federal Reserve's interest rate hike, the overall export expectation in the third quarter may weaken.