SunSirs: Rubber And Plastics: Afraid of being high? How Will PVC Spot Price Go?

1. Price Trend

According to the data from SunSirs (average ex factory price of SG5 by carbide method), the average price of domestic PVC mainstream on December 5 was 7,087.5 RMB/ton. It is 1.58% higher than the average price of domestic PVC mainstream on Thursday at 6,977.5RMB/ton (November 28). And it is 8.62% higher than the price in the same period last year.

On December 5, the PVC commodity index was 89.81, down 0.25 points from yesterday. It is 10.19% lower than the highest point in the cycle at 100.00 on September 5, 2011 and it is 54.13% higher than the lowest point in the cycle at 58.27 On December 20,2015 (Note: Cycle refers to September 1,2011).  

2. Market Analysis

Products: The fourth quarter is the off-season of consumption, but the off-season of PVC market is not light. The prices are rising and the heat of market is not decreasing. On November 29, the average price of domestic PVC mainstream has broken through 7,000 yuan. In December, the PVC market is still rising. However, PVC futures recently stopped rising and began to fall, driving the trend of the spot market.

At present, PVC spot is still tight. Social inventory in East and South China continues to decline. And the overall social inventory is still at a low level. With the North cargo moving southward and the end of centralized maintenance in autumn for production enterprises, the starting load of the industry has increased. Thereby the supply has increased, which has a certain role in alleviating the contradiction between short supply and demanding need.

At present, some manufacturers' offer price slightly loose, but the mind of increasing price is still strong. The industry is optimistic, and players actively enter the market. However, the downstream demand is quite rigid need and the actual transaction is tepid. The support of raw material end is weak. In the short term, PVC will mainly digest the increase in the early stage, and there is still the possibility of further reduction in some areas.

According to the data from SunSirs, up to December 5, the main quotation range of domestic PVC is 6,750-7,180 RMB/ton. At present, the mainstream price of PVC5 carbide in Changzhou is 7,120-7,200 RMB/ton that of PVC5 carbide in Hangzhou is 7,120-7,220 RMB/ton, and that of PVC ordinary carbide in Guangzhou is 7,260-7,350 RMB / ton. Prices across the region were high and consolidated, with some prices down slightly.

Futures: Recently, PVC futures fell sharply. On December 4, 2001, the main contracts fell by 40% to close at 6,710 RMB/ton, reducing their positions by 9,378 to 322,000, and closing at 2.55% in the late K-line. On December 5, 2001, the main contracts, closed at 6,705 RMB/ton, up 10 points, and the market remained volatile.

Industry chain: Crude oil prices will continue to fluctuate broadly in the near future. Crude oil stockpiles in the United States will drop sharply, coupled with OPEC release to extend production reduction expectations. Oil prices will soar, and the long-term trend will continue to be under pressure due to the weakness of global demand.

Ethylene fell. In terms of calcium carbide, the operation of calcium carbide in Northwest China is normal. The price consolidation is stable, and the price of upstream raw materials is low. Compared with last year, the price has dropped a lot. And the cost support is insufficient, which has a negative impact on the price of calcium carbide. In the future, the price of calcium carbide may be low. The import of PVC downstream products decreased, and the increase of export also supported the price.

Industry: according to the price monitoring from SunSirs, on December 5, 2019, there was one kind of commodities in the list of bulk commodity price on rubber and plastics that has an increase. That is natural rubber with 0.29% increase. There are two kinds of goods falling on a month on month basis. That is LDPE (- 0.31%) and PVC (- 0.28%) are the top two. The average price of this day was - 0.02%.

3. Market Forecasting

PVC analysts of SunSirs: Recently, PVC futures have fallen sharply, which is bad for the market. In addition, the maintenance of production enterprises has been completed, and the supply has increased, which eases some supply-demand conflicts. However, the tight supply situation needs time to ease. In the short term, PVC will mainly digest the previous gains and consolidate at a high level, and some regions may continue to reduce.

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