Chemical News
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China: Will Calcium Carbide Prices Rise on the Shutdown of Plants?
https://www.chemnet.com Aug 06,2010
High feedstock costs and increasing electricity prices forced more shutdowns of small-scale calcium carbide plants. Distributors focused on whether the shutdowns would push up market prices or impact on the downstream PVC production.
Presently, many small-scale calcium carbide plants were shut down or to be shut down in the major production areas, such as Inner Mongolia, Ningxia and Shaanxi. For example, in Shaanxi area, some plants were shut down since early April due to the upward electricity prices, and most on-stream plants operated at low rates of 50%. Besides, in early July, the increasing electricity prices in Inner Mongolia hammered the operating rates. Many plants in other areas, such as Ningxia, were also forced to shut down for cost pressure. Moreover, to complete the energy saving and emission reduction target during the “eleventh five year” period, eight ferroalloy, eight calcium carbide, and one electrolytic aluminum enterprises at Wuzhong, Ningxia faced production restriction since August, which will impact on the calcium carbide supply of the area.
Downstream PVC producers in Henan, Hunan and Sichuan areas reported low feedstock calcium carbide inventory. Most PVC producers, such as PVC producers in Hunan, were unwilling to cut operating rates due to tight calcium carbide supply and rising PVC prices, and they would rather purchase at higher prices to obtain more calcium carbide. In addition, the calcium carbide arrivals for downstream users were impacted by the sluggish transportation of chemical products, due to the transport peak period for agricultural products in Ningxia Area.
In summary, considering about the shutdown of calcium carbide plants as well as the transportation problems, calcium carbide prices are expected to rise with short availabilities, but prices will only climb slightly due to the cost pressure of downstream PVC producers.
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