Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - This week, PVC production decreased slightly, with the calcium carbide method increasing its load and the ethylene method decreasing its load. After the upstream ethylene reduces its load next week, ethylene - based PVC production will decrease, and overall PVC production is expected to continue to decline. The export order volume has slightly recovered. Even if the export tax rebate for PVC is cancelled, it is expected to have a price competitive advantage. The apparent demand for this week was slightly lower than expected, and the inventory decreased by 33,200 tons this week, with further inventory reduction expected next week. The spot price of caustic soda fluctuated strongly, the calcium carbide price increased this week, the price of ethylene increased significantly, and the export profit of PVC improved significantly. Attention should be paid to whether ethylene - based PVC will continue to cut production, the impact of next - week's warehouse receipt cancellation on the spot, and the risk of price correction [6][9][10] Summary According to the Directory 1. Spot Market - **PVC Supply and Demand**: This week's total PVC production was 489,900 tons, a decrease of 7,500 tons from last week. The ethylene - based production was 125,600 tons, a decrease of 15,200 tons, and the calcium carbide - based production was 364,200 tons, an increase of 7,700 tons. The weekly average import and export volumes remained unchanged at 5,000 tons and 67,500 tons respectively. The apparent demand was 460,500 tons, a decrease of 59,300 tons from last week. The total inventory was 975,900 tons, a decrease of 33,200 tons from last week. It is expected that next week's production will be 459,000 tons and 453,500 tons in the following week, and the apparent demand will be 449,100 tons and 426,800 tons respectively, with the inventory continuing to decrease [6] - **Related Product Prices**: The price of 32% caustic soda rose from 630 yuan/ton last week to 650 yuan/ton this week. The price of Shandong liquid chlorine dropped from 300 yuan/ton to 100 yuan/ton. The prices of Shandong raw salt and Shaanxi semi - coke remained stable. The prices of calcium carbide in Shandong, Shaanxi, and Wuhai increased by 150 yuan/ton, 175 yuan/ton, and 100 yuan/ton respectively. The prices of ethylene and VCM also increased [7] 2. Basis and Spread - **Basis**: The basis of calcium carbide - based PVC in East China, South China, and Shandong all weakened, with the East China calcium carbide - based basis dropping from - 14 yuan/ton last week to - 180 yuan/ton this week [9] - **Inter - month Spread**: The 9 - 1 inter - month spread strengthened from - 1 last week to 59 this week, while the 5 - 9 spread weakened from - 18 to - 34 [9] 3. Industrial Chain Profits - **Production Profits**: The calcium carbide production profit in Shaanxi increased from - 502 yuan/ton last week to - 327 yuan/ton this week. The production profits of some PVC production methods changed, such as the Northwest integrated PVC profit decreasing from 405 yuan/ton to 285 yuan/ton, and the imported ethylene - based PVC profit dropping from - 244 yuan/ton to - 1470 yuan/ton [9] - **Import and Export Profits**: The FOB Tianjin relative export profit increased from 916 yuan/ton last week to 925 yuan/ton this week, and the theoretical export profits to India and Southeast Asia increased significantly, by 925 yuan/ton and 1645 yuan/ton respectively [9] 4. Market Outlook - **Upstream**: The price of upstream PVC fluctuated, the price of caustic soda strengthened, and the comprehensive profit slightly declined. The calcium carbide - based production increased, and the ethylene - based production may decline. Attention should be paid to the load - reduction situation of the upstream cracking units [10] - **Mid - stream**: Traders mainly adopted the spot - futures arbitrage strategy, but the shipment situation has slightly deteriorated. The cancellation of warehouse receipts next week may suppress the spot [10] - **Downstream**: The downstream operating rate is still weak, but there is a slight situation of inventory replenishment [10] - **Strategies**: Pay attention to spot - futures arbitrage opportunities. Be cautious of the risk of correction for unilateral trading. Temporarily exit the 5 - 9 positive spread arbitrage. There is no option strategy for now [10]

Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - PVC is a hub variety connecting energy, chemicals, real estate, and infrastructure. The dual - process upstream determines cost elasticity, the mid - stream chlor - alkali co - production determines the supply rhythm, and the downstream real estate and infrastructure determine the demand level. Understanding the core framework of "coal - calcium carbide cost as the king, real estate demand as the soul, and inventory cycle as the rhythm" helps to understand PVC futures fluctuation rules [6]. Summary by Relevant Catalogs Upstream Raw Materials: Dual - Process Route Determines the Cost Background - China's PVC industry has a unique pattern with the calcium carbide method as the main process and the ethylene method as the auxiliary, matching the resource endowment of "rich in coal, poor in oil, and short in gas". The total domestic PVC production capacity is nearly 30 million tons, with the calcium carbide method accounting for about 72% and the ethylene method about 28%. The cost and fluctuation logic of the two routes are different [3]. - For the calcium carbide method, the upstream includes coal, limestone, and raw salt. Producing 1 ton of PVC consumes about 1.4 - 1.5 tons of calcium carbide. The cost of calcium carbide is directly determined by the price of steam coal, which in turn dominates the PVC cost center. Chlor - alkali co - production makes the prices of PVC and caustic soda often show a linkage effect [3]. - For the ethylene method, the upstream includes crude oil, naphtha, and ethylene. The cost is deeply linked to international oil prices. The raw materials ethylene and VCM account for 55% - 60% of the production cost. The ethylene - method devices are mostly distributed in the coastal areas of East and South China, and their costs are more affected by overseas energy and exchange - rate fluctuations [3]. Mid - stream Production: Chlor - Alkali Integration and Supply - Demand Pattern - The mid - stream is the core production link of PVC, including processes such as VCM synthesis, polymerization, and granulation. The industry features large production capacity, differentiated operating rates, and integration as the key. China's PVC production capacity accounts for nearly half of the world's, but the industry has long faced over - capacity pressure. Newly added production capacity is mainly of the ethylene method, while the expansion of the calcium carbide method is restricted by environmental protection and dual - carbon policies [4]. - The profit of production enterprises highly depends on the chlor - alkali balance. When caustic soda is profitable, enterprises tend to operate at high loads, leading to a passive increase in PVC supply; when caustic soda incurs losses, the devices reduce loads, and PVC supply contracts. This co - production mechanism makes the PVC supply elasticity weak, and the inventory cycle has a more significant impact on prices [4]. - Inventory is a key mid - stream indicator, including factory inventory, social inventory, and futures warehouse receipts. The periods around the Spring Festival, the maintenance season, and the real - estate peak season are key nodes for inventory fluctuations. The inventory accumulation cycle suppresses prices, while the de - stocking cycle boosts the market. Changes in PVC futures warehouse receipts directly affect market sentiment, and high warehouse - receipt levels often correspond to periodic pressure [4]. Downstream Demand: Dominated by Real Estate and Infrastructure, with Diverse Application Scenarios - PVC downstream is mainly composed of hard products, supplemented by soft products. The demand is highly concentrated in the construction and infrastructure fields, accounting for over 60% of the total, making it a typical "cyclical product" [5]. - The largest demand is for pipes and fittings, accounting for about 40%, which are used in municipal water supply and drainage, gas pipelines, and real - estate pipe networks, and are strongly related to real - estate completion and infrastructure investment. The second - largest demand is for profiles and doors and windows, accounting for about 20%, benefiting from affordable housing, old - building renovation, and energy - saving window replacement. Soft products, including cable materials, artificial leather, films, and floors, account for about 20%, with relatively stable demand. Other fields such as packaging, medical, and industrial products account for about 10%, providing demand resilience [5]. - The demand rhythm shows obvious seasonality: the spring resumption of work and the autumn rush to complete projects are the two peak seasons, while winter and the rainy season are the off - seasons. Exports are also important, with Southeast Asia, the Middle East, and Africa as the main destinations. Export tax rebates, international price differences, and shipping prices directly affect export volumes, serving as an important channel for clearing domestic over - capacity [5].