SunSirs: Low Deadlock in China PVC Futures in the First Half of June

Recently, the prices of various products in the plastic industry market have mostly seen low and narrow range consolidation, with three types of plastic futures showing mixed ups and downs. Since the beginning of June until now, the overall profit of the plastic industry has been significant. On the macro level, the increase of the US Debt limit aggravated global inflation, and economic recession fears spread. Affected by this, the international crude oil, which is a plastic remote raw material, has seen a decline and a decrease. At the same time, the load rate of the downstream plastic industry is not ideal, consumption follow-up is lagging, and market momentum is poor. Within half a month, the plastic futures market continued to be in a pattern of off-season consumption and weakened costs, with prices showing a narrow range of consolidation.

According to the Commodity Market Analysis System of the Business Society, as of June 14th, the average half month increase in spot prices of various products is from high to low, followed by PP (wire drawing)+0.81%, LLDPE+0.18%, and PVC-0.18%.

According to the commodity market analysis system of the business community, the average price of PVC carbide SG5 was 5,524 RMB/ton on June 14, down 0.18% from the beginning of the month. The price of PVC in the domestic Spot market has fluctuated in a narrow range since half a month ago. The current market trading atmosphere is light, downstream procurement is lukewarm and not enthusiastic, inquiries and procurement enthusiasm are not active, and transactions with high priced goods are hindered, and buyers have a heavy wait-and-see sentiment. The futures market also saw a weak adjustment. On June 14th, PVC2307 closed at 5,684 RMB/ton, with a settlement price of 5,680 RMB/ton, providing moderate support for spot prices. In terms of upstream calcium carbide, due to the decline in the price of raw materials such as Shenmulan charcoal, the market for calcium carbide has been dragged down, resulting in insufficient cost support for PVC. It is expected that the PVC market will experience weak consolidation in the short term, and it is recommended to closely monitor changes in the news.

Recently, the spot prices of plastic futures and three materials have also stabilized at a low level. On the macro level, the external economic environment has performed poorly, and the deepening of global inflation is still exacerbating the decline of crude oil and other bulk commodity raw materials. There is a direct negative impact on plasticizing enterprises, as the long-term low factory prices of products increase business risks, and operators have weak confidence in the future market. At present, the construction of aggregation enterprises is relatively stable, and the supply side is stable. But automobiles, agricultural films, and household appliances have entered the traditional off-season, and PP and PE consumption is sluggish. PVC has also been affected by the contraction of the building materials market and its demand has been downgraded. The overall demand for the three materials tends to follow up and maintain production, with market supply exceeding demand. In summary, the three materials of plastic futures are currently affected by many bearish factors such as weak costs and supply-demand conflicts. However, due to the significant drop in prices in the early stages and the digestion of some short positions, the market entered a narrow consolidation market in the first half of June. It is expected that in the short term, the three materials of plastic futures may continue this weak consolidation pattern.

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