“Now the imbalance between production and demand in the chlor-alkali industry and the continued expansion of production capacity are still very serious and must be given sufficient attention.†At the 14th China Chlor-Alkali Forum concluded on the 25th, Chairman of China Chlor-Alkali Industry Association and Shanghai Chlor-Alkali Chemical Co., Ltd. Li Jun, chairman of the company, said without hesitation.
PVC, which is an important downstream product of the chlor-alkali industry, also faces severe supply and demand conflicts. Some participants in the chlor-alkali business told reporters that in addition to increasing investment in science and technology, extending the product chain, and promoting the upgrading of the industrial structure, the merger and reorganization of enterprises, and the development of large-scale intensification is also an irresistible trend. The integration of chloro-alkali industry will gradually accelerate in the future.
For the domestic chlor-alkali industry, the imbalance between supply and demand can absolutely be regarded as a "probable" problem. It is understood that since 2000, China's chlor-alkali industry has developed rapidly. At present, China has become the world's largest chlor-alkali producer and consumer. According to the data provided by China Chlor-Alkali Industry Association, as of the end of 2011, China's PVC production capacity has reached 21.62 million tons, but since 2008, the utilization rate of PVC capacity of domestic enterprises has been below 60%. In the same period, domestic caustic soda production capacity was approximately 35 million tons, but the actual capacity utilization rate has been below 80%.
“What is most worrying now is the continuous expansion of production capacity in the chlor-alkali industry.†Li Jun said that although the growth rate of domestic PVC and caustic soda production has slowed down in 2010 and 2011, the absolute amount is still huge. It is estimated that in 2012, domestic caustic soda production capacity will reach 38 million tons, and PVC production capacity will further increase to 26.6 million tons, and these two indicators have almost exceeded the target line of the “Twelfth Five-Year Plan†industry plan. "The situation of oversupply in the future will surely become more severe, and the contradiction between chlor-alkali balance in local areas will become even more prominent."
For the chlor-alkali industry, the difficulty at the moment is not only due to excess capacity. “The current demand for downstream products companies is still very weak.†Wang Honggui, sales manager of Changzhou Bell Chemicals Co., Ltd. told reporters that with PVC as an example, with the cooling of the real estate market, the consumption of PVC has dropped significantly, and continues to go in the macroeconomic and real estate markets. In the weak case, PVC demand is not optimistic.
“In the future, the United States may export a large amount of PVC and liquid caustic so as to form an impact on the global market.†Zhan Yieng, director of the plastics division of Taiwan Plastics Industry Co., Ltd., said that the current domestic demand for PVC in the United States is still weak and exports must be increased to maintain PVC sales. In 2011, its PVC exports accounted for 39% of all sales. At the same time, due to the low price of natural gas for PVC raw materials in the United States and obvious cost advantages, this will be a big challenge for China's chlor-alkali production companies.
For the severe industrial situation, more and more people in the chlor-alkali industry are beginning to look for ways to crack. Li Jun believes that with the active adjustment of domestic macroeconomic policies, economic and industrial growth slowed down, which created a rare opportunity for structural adjustment of the chlor-alkali industry. Li Jun suggested that strict implementation of the chlor-alkali industry restructuring guidance directory, digestion and elimination of backward production capacity, promote mergers and acquisitions of enterprises, to the development of economies of scale. For chlor-alkali production enterprises, they should adhere to scientific and technological innovation and actively explore the extension of products from the traditional chlor-alkali products to the fine chemical products of chlorine.
"For PVC trading companies, because they must hold a large number of standing stocks, how to deal with price fluctuations has become the key to business development." Yuan Xiaoming, general manager of Zhejiang Special Petrochemical Co., Ltd. told reporters that domestic PVC prices have fluctuated frequently in the past two years. Can not make use of the futures market to hedge risks, it is difficult for trading companies to develop. For example, he said that in August 2011, the domestic PVC market experienced a wave of major declines, due to timely use of the futures market for hedging, ensuring the stable operation of the company. Yuan Xiaoming also said that since the PVC futures was listed three years ago, the financial attributes of PVC have become more obvious, and financialization has become an inevitable trend in PVC trade. Enterprises must use the hedging and futures arbitrage in the futures market to actively explore the path to profitability. On this basis, through the business chain, logistics integration, trade service and other measures to achieve the transformation of enterprises from a simple wholesale and retail traders to the industry chain integration services.
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