Short Cut: At current stage, it is mainly based on digesting the pre-growth gains. There is no obvious fundamentally bullish news for the time being. The lack of actual support for the upward trend of PVC is expected, and the weak trend is expected.
1. Price Trend
According to the data from SunSirs (average ex-factory price of calcium carbide method SG5), the average domestic mainstream PVC price on December 12 was 7,052.5 RMB/ton, which was 0.47 RMB lower than the average domestic mainstream PVC price on Thursday (December 5) of 7,087.5 RMB/ton, with a decrease at 0.49% and a year-on-year increase at 7.26%.
On December 12, the PVC commodity index was 89.37, which was the same as yesterday. It is 10.63% lower than the highest point of the cycle at 100.00 on September 5, 2011 and is 53.37% higher than the lowest point at 58.27 on December 20, 2015 (Note: Period refers to September 1,2011 to present).
2. Market Analysis
Products: Since November, PVC has been rising for several weeks. However, it has been steadily weakening in recent days, and the heat has gradually receded. Recently, the overall start-up load of PVC enterprises has increased, and the overhaul of enterprises has ended. The spot supply has increased slightly, but the overall supply is still tight. The actual trading atmosphere is tepid, and the market transaction price is mostly concentrated in the low-end. Multi-dimensional downstream procurement is just needed. Be cautious and wait-and-see attitude. Most of the quotations are adjusted according to their own, and they go along with the market. According to the data from SunSirs, up to December 12, the mainstream price range of domestic PVC is 6,700-7,130 RMB/ton. At present, the mainstream of PVC5 type calcium carbide in Changzhou area is 7,100-7,200 RMB/ton; the range of PVC5 type calcium carbide in Hangzhou area is 7,100-7,220 RMB/ton; the mainstream price of PVC ordinary calcium carbide in Guangzhou area is around 7,320-7,420 RMB/ton. Prices around the world consolidated at a high level and fell slightly in some areas.
Recently affected by the environmental protection of the northern heating season, Hebei has initiated a response to the severe pollution weather level II. Some downstream product companies have also reported production cuts, increased production suspensions, and limited demand for PVC. In addition, the increase in previous weeks has pushed PVC prices in the high-level price in regard to off-season. At current stage, it is mainly based on digesting the pre-growth gains. There is no obvious fundamental good for the time being. The lack of actual support for the upward trend of PVC is expected, and the weak trend is expected.
Futures: Recently, the PVC market has fallen. Now the main contract has been converted from 01 to 05. The 01 contract has a large difference between the spot price and some pre-judgments say that this gap will be repaired. On December 11th, the main contract fluctuated downward in the night of 2005, closing at 6570 RMB/tons (-25), positions increased by 2,838 to 379,000. On December 12th, the goods closed at 6550 on the night, fell by 5, and opened higher and ended lower.
News: In November 2019, the domestic PVC production was 1.6417 million tons, an increase of 0.29% month-on-month and 1.03% year-on-year.
Industrial chain: Crude oil prices will continue to fluctuate widely in the near future, and ethylene prices will decline. In terms of calcium carbide, the construction of calcium carbide in the northwest region is normal, and the price consolidation is stable. The prices of upstream raw materials have been sideways at a low level. Compared with last year, the price has fallen sharply, and the cost support is not strong enough. The downstream PVC products companies are not enthusiastic. Due to the impact of environmental protection, production has stopped increasing, and demand for PVC is limited.
Industry: According to the price monitoring from SunSirs, on December 12, 2019, there are two products with increase rate in the rubber and plastic plate in the commodity list. The top two products are PET (1.16%) and PA66 (0.06%). There are two types of goods that are down from the previous month. The top two products are PC (-1.78%) and PP (-1.21%). The average daily increase or decrease was -0.11%.
3. Market Forecasting
SunSirs' PVC analysts believe that PVC futures have recently fallen sharply, and the spot market has also fluctuated and lowered. At present, the inventory is still low, most manufacturers are still firm, and the tight supply is difficult to completely change in a short time. It is expected that PVC market will be highly sideways in the short term. Some of individual companies will slightly change their quotation. However, with the end of maintenance of enterprise, more goods will flow into the market but the demand is still limited. In the future, PVC price will go down.
If you have any questions, please feel free to contact SunSirs with support@sunsirs.com