CITIC Securities Futures: Ethylene prices skyrocket causing pressure on PVC costs, industry operating rate decreases.

The sharp rise in crude oil prices pushes up the price of ethylene, causing pressure on the cost of PVC produced by ethylene method and a decline in production. The price of calcium carbide is on the rise, leading to a rigid increase in the cost of the calcium carbide method. On the supply side, with the start of spring maintenance and an increase in maintenance of ethylene method devices, the industry's operating rate is at 80.92%, leading to a marginal tightening of supply. On the demand side, downstream pipe and profile production are at only around 40%, with low acceptance of high prices, mainly driven by small essential purchases resulting in weak transactions. On the export side, there was a rush to export before the cancellation of tax rebates on April 1st, temporarily boosting demand, but weakening competitiveness in the long term. In terms of inventory, factory inventory is decreasing but social inventory remains high at 1.4 million tons, exerting pressure on prices. In the short term, costs and maintenance support prices, but weak demand and high inventory will constrain price increases. It is expected to maintain a weak shake, focusing on geopolitical situations, the intensity of spring inspections, and the resumption of downstream operations.