[YUHE Floor, Changzhou]
Until today,13rd Oct 2021, PVC is CNY 14525 per ton. It increased 45% in less than a month. This is really an impossible increase, but the increase doesn’t seem to stop.
So what is driving PVC price going this high? What does it mean to PVC floor manufacturers in China?
You may not know that in China 73% PVC is made from coal, 27% from petrol. And the PVC, which is the key material of SPC floor, LVT floor, and WPC floor, belongs to the 73%. When coal is in great shortage, and its price now is triple that of March of 2021, it becomes easier to understand the drive behind PVC increases.
In addition to the price increases of coal-based material, China is facing a critical power crunch as China’s 60% electricity relies on coal-fired power. Millions of homes and businesses were hit by power cuts in recent weeks, and power rationing has been implemented in industrial enterprises, working only 3 days in one week is very common. Well, our government has taken immediate actions to boost domestic coal output. Three major coal-producing provinces have pledged to increase production. For example, Inner Mongolia region, the second-largest coal producer, has told more than 70 mines to boost annual output capacity by nearly 100 million tons. We hope the PVC price could stop increasing, or at least stable.
PVC floor manufacturers are in hot water now. Firstly, it is very difficult to buy PVC resin as its quantity is very limited. Many extra costs have to be added. Secondly, most SPC floor customers can not accept such high prices, making PVC floor manufacturers unwilling to keep stocks of PVC resin. In the last, electricity power is strictly limited, manufacturers can only run 3days in one week. Not only adding extra cost but also prolong the lead time. In this case, some have stopped running, only a few are open to new orders.
PVC Floor market is totally ruined in the Year 2021. We need to work together, including floor manufacturers, distributors, and retailers, to build back better.