SunSirs: PVC Prices Fell by 7.14% in February

The average price of domestic mainstream PVC (the average ex-factory price of calcium carbide method SG5) on February 29 was 6337.5 RMB/ton, down 7.14% from 6825 RMB/ton on the first day of the month, and up 0.6% compared with the same period last year. 

On March 4, PVC commodity index was 79.04, up 0.16 points from yesterday, down 20.96% from 100.00 points (2011-Septmber-05), up 35.64% from 58.27 points, the lowest point on December 20, 2015 (Note: cycle refers to 2011-Septmber-01 till now). 

Products: On February, PVC futures are quite volatile, occasionally rebound, but not durable. PVC spot prices continue to fall. The market was weak. In the past, during the Spring Festival, PVC manufacturers will reduce the load of the operation, and sometimes uninterrupted production. After the Spring Festival, as the downstream enterprises started to increase demand, PVC inventory gradually reduced. However, due to the impact of public health incidents this year, the resumption of work by downstream PVC enterprises has been delayed again and again, and some construction industries have been postponed to April. PVC market started slowly on the demand side and the market trend is not good.

At the same time, the transportation is not smooth. It increased the difficulty of PVC sales, and the market trade is weak. The transaction is limited, and there are also some production enterprises do not report the price. The market is more than empty interweave. To be more specific, the mentality of the middle traders was negative, and they were under shipping pressure. PVC price was under downward pressure. Near the end of the month, with the gradual easing of transportation, as well as PVC downstream products enterprises return to work enterprises improve, the market began to have a little vitality, but the overall downstream demand is still depressed. It is difficult to boost PVC. 

On the other hand, PVC inventories are still high at present. Production manufacturer has increased, and supply was adequate. The demand side maintained just-need-to-purchase strategy. Many enterprises first stock up to a certain extent. Therefore, the demand is not high and the whole PVC market oversupply situation. The vulnerability turns normal. If it cannot restore demand side, PVC manufacturer will advance into the spring state of repair. 

As of March 4, the mainstream quotation range of domestic PVC is 6,000-6,450 RMB/ton. At present, the mainstream PVC5 in Changzhou is around 6150-6320 RMB/ton, the PVC5 in Hangzhou is around 6180-6350 RMB/ton, and the mainstream price of ordinary PVC in Guangzhou is around 6180-6200 RMB/ton. The real deal is suggested to be negotiated.

Futures: On March 3, PVC main V2005 contract hit the high and fell, closing at 6270 RMB/ton, more than the previous trading day +10 RMB; Volume of 102,972 hands, -8449 hands; Position 198083 hands, -3732 hands, base difference -50 RMB, -40 RMB; 5-9 spread -115 RMB, +0 RMB.

Industrial Chain: The price of crude oil is super rebound influenced by peripheral macro news boost. However, as for demand side, the crude oil demand outlook is that pessimistic atmosphere remains unchanged. The three institutions generally cut crude oil demand growth forecast for 2020, and the decline is larger. Crude oil market in the near future is expected to more under the influence of interference factors. And it will a wide range of fluctuation. In the medium- and long-term view, crude oil does not have reverse market news or the possibility of rising sharply. As for calcium carbide, the factory price slightly increased, and the downstream customers calcium carbide procurement enthusiasm is general. Calcium carbide supply is tight. In the future, calcium carbide will have a small fluctuation.

Industry: A total of 0 kinds of rubber and plastic products rose on the rise and fall list of commodity prices in February 2020. There were 14 kinds of commodities that declined on a month-on-month basis, 10 of which dropped more than 5%, accounting for 62.5%. Natural rubber (-15.79%), styrene-butadiene rubber (-13.22%), and styrene-butadiene rubber (-12.94%) were the top three declining products. Both rose or fell -6.24 per cent this month.

Market forecasting: SunSirs PVC analysts think that at present PVC demand has improved, but still slow start. There is a general trading. The PVC spot market prices generally stable and some enterprises according to their own has a price adjustment. PVC is still expected to fall in the short-term risk, timely pay attention to the macro and terminal enterprises recovery.

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