According to the production process of PVC, PVC is polymerized from vinyl chloride, which comes from two sources: vinyl chloride produced by acetylene method and vinyl chloride produced by ethylene method. For acetylene production process, the raw materials are calcium carbide and water. The ethylene process comes from naphtha cracking and coal to olefins.
Therefore, the value chain analysis of PVC needs to be divided into acetylene PVC value chain, ethylene PVC value chain and PVC downstream value chain.
Figure 1 Flowchart of China PVC Industrial Chain (Source: Aihui Assets)
Industrial chain 1: PVC value chain by acetylene method
Coal is used to make coke, coke and lime are used to make calcium carbide, calcium carbide and water are used to make acetylene, and acetylene is used to make vinyl chloride, and then polymerized into PVC. The industrial chain of acetylene PVC is divided into three main links, namely, the production of calcium carbide, acetylene and PVC. Although the final raw material product is coal, calcium carbide and acetylene in the middle have become the key products that affect the fluctuation of value chain.
According to the analysis of calcium carbide value chain, the cost of calcium carbide comes from 0.8 tons of coke and about 1 ton of white ash, in which the proportion of white ash is the highest, but the value of white ash is low, so coke accounts for the largest proportion in the cost of calcium carbide. There is a direct and strong correlation between the price fluctuation of coke and that of coal.
In other words, the fluctuation of coal price directly affects the price of coke, and the price of coke has the greatest weight on the cost of calcium carbide. Since 20021September, the price of coal has soared, and the price of calcium carbide has also risen several times, from the initial 2,800 yuan/ton to nearly 8,000 yuan/ton.
Therefore, the increase in the price of calcium carbide last year was largely due to the skyrocketing price of coal. Among them, the relationship between supply and demand of calcium carbide has partially promoted the price of calcium carbide, but it is not the direct cause of the skyrocketing.
For the cost calculation of acetylene, due to the characteristics that acetylene cannot be transported, the commodity quantity of acetylene is very small. Most enterprises directly produce PVC through calcium carbide, so the cost of acetylene can be ignored, and the cost of PVC can be calculated directly through calcium carbide.
The cost of PVC by calcium carbide method is calculated according to the model of 1.4 tons of calcium carbide+processing fee, in which calcium carbide becomes the largest variable cost of PVC. According to the price in April 2022, calcium carbide accounts for about 82% of the cost of PVC, accounting for a relatively large proportion.
Therefore, if the price of calcium carbide fluctuates, the cost of PVC will inevitably fluctuate, which will bring great reference to the pricing of PVC by calcium carbide method. At present, the price of coal has been controlled, the price of calcium carbide has returned to normal, and the prices of calcium carbide and PVC are relatively rational. On the premise that there is no sudden situation leading to large fluctuation of coal price, the stable fluctuation of calcium carbide price will inevitably restrict the fluctuation range of PVC price.
Industrial chain 2: PVC value chain by ethylene method
If the value chain of calcium carbide PVC is subject to the fluctuation of calcium carbide price, then the ethylene PVC that has emerged in recent years is more subject to the change of raw material ethylene cost. Therefore, although the raw materials of two different PVC production processes are different, the transmission logic of the value chain is the same, and the pricing is more based on the other party's price setting level. The relationship between them is mutual influence and interdependence.
The raw material of PVC by ethylene method is ethylene, which comes from naphtha cracking and coal production. The cost formula of producing ethylene from naphtha cracking is different from that in the international market, but it all depends on the change of naphtha cost. For example, taking 1.3 ton naphtha+processing fee as the calculation model of ethylene cost, or using naphtha cracking by-product as the calculation method of offset, or taking the price difference between naphtha and ethylene as a constant, etc., all reflect the influence of naphtha price on ethylene cost.
According to incomplete statistics, naphtha accounts for more than 80% of ethylene cost, which is the biggest influencing factor of ethylene cost.
In the cost formula of PVC by ethylene method, the main raw materials are ethylene and chlorine, in which the unit consumption of ethylene is in the range of 0.4-0.5 and the unit consumption of chlorine is in the range of 0.55-0.65. According to the current market price, ethylene accounts for more than 78% of the cost of PVC, which is the biggest cost influencing factor, while chlorine gas has little influence on the cost of PVC because of its low price.
That is to say, the price of PVC by ethylene method and the fluctuation of ethylene price have a direct impact on the cost of PVC, and are also the main factors to be considered in setting the price of PVC by ethylene method. It should be noted that due to the different production processes of PVC, the pricing of PVC is more based on the relationship between supply and demand in the market and the pricing level of leading enterprises with different processes. On the premise of a certain profit, the fluctuation of raw material prices has little influence on the pricing of PVC.
Value chain of PVC downstream products in industrial chain
According to Pingtou Ge, at present, the downstream of PVC is mainly used for pipes. PVC pipes are widely used in China's construction field, and their market consumption growth rate is closely related to China's economic growth. In addition, PVC is also used in films, profiles, floors, bottles and other fields, and is widely used as a whole.
Fig. 2 downstream consumption structure of PVC in China.
In the field of PVC pipes, in addition to the cost change of PVC, there are also PVC modified plasticizers and processing costs, among which PVC accounts for the largest proportion, followed by modifiers and plasticizers. Among them, the cost of PVC in the field of profile modification is obviously higher than that of ordinary pipes, and the date is increased by more than 30%.
Therefore, for the downstream industrial chain of PVC, the processing cost of ordinary PVC products is quite different from that of profiles, and its value chain is also obviously different. The cost of profile modification is high, while the variable cost of ordinary pipe PVC is high.
Finally, Pingtou Brother wants to say that the PVC value chain is the logic of downward transmission according to the cost of raw materials, and the fluctuation of calcium carbide price caused by coal has a great influence on the current cost change of PVC. In addition, the correlation between the cost changes of PVC and petroleum is weak. Although there is an ethylene production mode, the pricing logic of ethylene PVC is more based on the price level of calcium carbide PVC. At present, under the premise of high crude oil price, the price fluctuation of PVC has little feedback to crude oil.