SunSirs: Rubber And Plastics: Under The Short Supply, Both Spot- And Future-Price of PVC Increases Dramatically.

1. Price Trend

According to the data from SunSirs (the average price of SG5 for calcium carbide method), the domestic PVC price is 6,650 RMB/ton on November 01, and the domestic PVC price is 6,817.5 RMB/ton on November 21st, an increase at 2.52% yesterday and an increase at 6.14% year-on-year. On November 21, the PVC Commodity Index is 86.39, which is the same as yesterday. It is lower 13.61% than the highest point at 100.00 on September 5, 2011 and it is 48.26% higher than the lowest point at 58.27 on December 20, 2015 (Note: Cycle refers to September 1, 2011 to date).

2. Market Analysis

Product: Since November, PVC futures have been strong. Industry players expect to have a chance to fall from the peak. On November 21, closing price of night future is 6580, flat. The PVC spot opens up by the futures pulling up. In the off-season of consumption, PVC continues to rise. This is mainly due to the shortage of supply, associated with the continuous decline in social inventory. Since October, the lasting time of seasonal maintenance of some areas is much longer than expectations. As time is long and concentrated, the inventory of each factory begins to decrease. At the same time, some manufacturers who were pessimistic in the previous stage begin actively taking the opportunity to ship. This situation promotes the bottoming out even the cost inversion. At present, enterprises have stepped out of maintenance, and the operating rate in the industry has improved. However, the overall market is still in tight supply, and there is a large demand. The major manufacturers have shipped the main orders, and the pre-sales are better. The traders adjust their prices according to themselves and market conditions. In terms of downstream players, they have limited capacity, and the cautious wait-and-see attitude is rising. According to data from SunSirs, up to November 21, the domestic mainstream PVC price is around 6,640-6,900 RMB/ton. At present, the mainstream price of PVC5 type electric stone in Changzhou area is 6,730-6,830 RMB/ton, and the area of ​​PVC5 type electric stone in Hangzhou area is 6,740-6830 RMB/ton. The mainstream price of PVC ordinary electric stone in Guangzhou area is around 7,000 RMB/ton. Price increase varies from place to place.

News: According to the National Bureau of Statistics, China's real estate development investment in January-October increased by 10.3% year-on-year while last year is 10.5%. From January to October, the sales area of ​​commercial housing increased by 0.1% year-on-year. The growth rate firstly turns positive this year. From January to September, the decrease rate is 0.1%. The real estate industry is not strong, and there is no good support for PVC building materials. Taiwan has lowered its offer for shipping in December. Meanwhile, this year China’s cancellation of long-term anti-dumping policies against the United States, Japan, South Korea and Taiwan, as well as the gradual reduction of PVC maintenance companies in the future, will all be negative factors that will curb the sharp rise in PVC.

Industry chain: Recently, crude oil prices have risen and fallen sharply, fluctuating widely. On November 20, the US WTI crude oil futures market price rises to US$57.11 per barrel, an increase by US$1.90 or 3.4% from the last trading day. Brent Crude oil futures prices rise to $62.4 per barrel, an increase by $1.49 from the last trading day, or 2.4% increase. In terms of news, the demand for gasoline and distillate in the United States decreased, and the total annual growth of refined oil inventories narrowed. The European and American crude oil futures closes higher. However, the decline in oil prices in the previous period is relatively high, and the support for ethylene is insufficient. The market for ethylene outer disk fell. In the case of calcium carbide, the operation of calcium carbide in the northwest region is normal, and the price falls slightly. Compared with last year, the price fell sharply and the cost support was insufficient. The downstream products enterprises as a whole are still acceptable, and most of them maintain the need to replenish the warehouse. The ability to receive high-priced PVC is limited, and the wait-and-see attitude is on the rise.

Industry: According to price data from SunSirs, on November 21, 2019, there are 2 kinds of commodities in the rubber and plastics sector of listed bulk commodities increasing. Top 2 commodities are styrene-butadiene rubber (0.36%) and butadiene rubber (0.23%). There are 6 kinds of commodities with a decrease in the chain ratio, and the top 3 products are PA6 (-1.55%), PET (-1.15%) and PP (-0.79%). The average daily price change rate is -0.25%.

3. Market Forecasting

The PVC analyst of SunSirs believes that with the heating season of north coming, there are still some enterprises in the state of maintenance. The supply side has weakened, the merchants have a strong willingness to price, and the PVC price will remain high in the short term. With the end of the maintenance of the equipment in the market and the release of new capacity, it is possible that PVC price will decrease.

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