SunSirs: PVC Has Not Yet Enter into Upward Road

On March 18, the domestic PVC mainstream average price (calcium carbide method SG5 ex-factory average price) was 6187.5 RMB/ton, down 0.6% from the previous day, compared with the same period last year down 2.56%.

The PVC commodity index was 78.41 on March 18, 0.47 points lower than yesterday, 21.59% lower than the highest 100.00 points (2011-Septmber-05) in the cycle, and 34.56% higher than the lowest 58.27 points on December 20, 2015 (Note: Period refers to 2011-Septmber-01 till now). 

Product aspect, the domestic PVC market on Wednesday fell slightly, mainly digesting the preliminary rise. PVC futures, due to the recent oil market crash, its trend is not good, but temporarily the impact is not big. The spot market volatility is limited, a small shock, but the market trading was thin.

As the terminal enterprises continue to return to work, and the demand has increased to a certain extent, but some enterprises are still faced with difficulties to return to work. Hence, the overall operating rate is low. Most of them are mainly just need replenishment. The current demand side is too weak to form a strong support for the PVC market. Manufacturers sales pressure is still very large.

The operating rate of PVC enterprises is gradually improved, the inventory continues to increase, and the market supply is abundant. The supply exceeds the demand situation is difficult to change in the short term. At the same time, the cost of calcium carbide support is strong. PVC enterprises have stable price mentality, waiting-and-seeing mainly. Some enterprises reduced the price of goods, but the overall market is still low, which is difficult to boost.

As of March 18, the domestic PVC mainstream quotation range is 5950-6350 RMB/ton. At present, the main PVC5 calcium carbide material in Changzhou area is about 6080-6210 RMB/ton, the PVC5 calcium carbide material in Hangzhou area is about 6080-6230 RMB/ton, the main price of PVC ordinary calcium carbide material in Guangzhou area is about 6050-6100 RMB/ton. The deal can be discussed.

Futures: PVC main V2005 contract concussion fell, the close price of 6055 RMB/ton, compared with the previous trading day -110 RMB; Turnover 120,748 hands, + 44,667 hands; Position 152,462 hands, -7,638 hands, basis difference of 95 RMB, +100 RMB; 5-9 price difference -120, -0.

Industry Chain: On March 16, the price of WTI crude oil futures market in the United States dropped sharply, falling to below $30 per barrel again, with the main contract at 28.70 $/barrel, down $3.03 (-9.55%). Saudi Arabia and Russia fell out over a deal to cut output, triggering a sharp drop in crude prices. It fell to its lowest level since 2017, which was unable to support ethylene prices. SunSirs’ data analysts expect prices to remain in a narrow range. Calcium carbide market had small shock. The market forecast in mid-March northwest area calcium carbide price will fall slightly.

Industry: On March 18, 2020, the rubber and plastic commodity list shows that there was 1 commodity that increased on year-on-year ratio, which is natural rubber (0.21%). Meanwhile, there were a total of 10 commodities that decreased month-on-month. The top 3 products of the decline were BR (-2.86%), SBR (-2.69%) and PA6(-1.71%). The daily decrease was -0.76%.

Market Forecast: SunSirs PVC analysts think that the current PVC market is weak, and the overall slightly depressed. Futures trend is not good, spot price awareness strong, but short - term pattern of oversupply difficult to change, the price of a small drop in profit shipment. It is expected that in the short-term PVC market is difficult to find good, which was difficult to pick up. Pay more attention to the trend of crude oil, futures and downstream resumption of work.

If you have any questions, please feel free to contact SunSirs with marketing@sunsirs.com.