In the first quarter of 2023, the epidemic control was fully opened, and coal prices fell again and again, resulting in a serious shortage of calcium carbide cost support. Adding to the US dollar interest rate hike, some banks in Europe and the United States have been thunderstruck, investors’ risk aversion has increased, PVC futures prices have bottomed out, social inventories have been high, exports have fallen short of expectations, and PVC spot prices have fluctuated. Multiple factors have affected the continuous decline in carbide prices, with carbide prices dropping from 3700 yuan/ton at the beginning of January to 3200 yuan/ton at the end of March, with an overall decline of 13.51% in the first quarter.

In January, the PVC market price rose sharply, and the demand for calcium carbide increased. The price of calcium carbide increased slightly by 3.15%. In February, the price of blue charcoal fell sharply, with insufficient support, and the price of calcium carbide plummeted 8.73%. In March, the pre-sale orders for calcium carbide decreased, and the PVC market price fell. The price of calcium carbide continued to decline by 8.13%, and there was still a downward trend at the end of the month.

From the supply side, in the first quarter, the factory prices of mainstream calcium carbide manufacturers in the northwest region fell sharply. Overall, the price of calcium carbide fell sharply in the quarter, with insufficient order follow-up, high inventory pressure, and average shipment.

Cost side: sharp decline in the price of blue charcoal

In the first quarter, the price of carbide upstream blue charcoal fell sharply. The market price of Shenmulan charcoal intermediate fell from 1800 yuan/ton in mid January to 1230 yuan/ton at the end of March, a decrease of 31.67%. The price of upstream blue charcoal has dropped significantly, and the cost support for carbide is seriously insufficient.

Demand side: PVC market price fluctuates

The downstream PVC market price of calcium carbide fluctuated in the first quarter. In January, the PVC market price slightly increased by 4.29%. In February, the PVC market price first fell and then rose, with the PVC price first falling from 6338.33 yuan/ton in early February to 6153.33 yuan/ton in mid February, a decrease of 2.92%. Later, it rose to 6313.33 yuan/ton at the end of the month, up 2.60%. In February, the overall PVC market fell by 0.39%. The market price of PVC continued to decline in March, with the price of PVC falling from 6243.33 yuan/ton at the beginning of the month to 6100.00 yuan/ton at the end of the month, a decrease of 2.30%. At the end of the month, prices fell 31.31% year-on-year. The order performance of PVC downstream enterprises was poor, and PVC export forward orders weakened. The overall demand support for PVC was limited, coupled with high social inventory, and the price performance of PVC was weak.

In the first quarter, the market price of 1,4-butanediol rose first and then fell. 1. In February, the market price of 1,4-butanediol significantly increased, with an overall increase of 43.15%. In December, the market situation was very good, and the enthusiasm for carbide procurement increased. In March, the market price of 1,4-butanediol significantly decreased, from 13816.67 yuan/ton at the beginning of the month to 11666.67 yuan/ton at the end of the month, a decrease of 15.56%. Affected by the mentality of buying up rather than buying down, the enthusiasm of 1,4-butanediol enterprises for calcium carbide procurement weakened in March.

Looking at the future market: In mid to early April, the calcium carbide market may decline slightly, mainly through consolidation. The price of upstream raw material blue carbon has stabilized at a low level, and the cost of calcium carbide is generally supported. Calcium carbide enterprises have a high operating rate and high inventory. The downstream PVC and 1,4-butanediol market continued to decline, resulting in insufficient downstream demand. As supply exceeds demand, it is predicted in the future that the price of calcium carbide in the northwest region may fluctuate slightly in the first ten days of mid April, mainly due to consolidation.