SunSirs: Positive Fundamentals Gather in July, China EVA Market is Strong

In the past month, the domestic EVA market has shown a positive trend, with spot prices gradually rising. According to the Commodity Market Analysis System of SunSirs, as of July 26th, the average ex factory price of EVA in China was 13,633.33 RMB/ton, with a price increase of 6.23% month on month.

In terms of raw materials: Since July, the market performance of ethylene in the raw material end has been relatively strong. Although the level of domestic demand is average, market trading is weak, which creates a drag on the market. However, the cost side of petroleum naphtha has been strengthened due to the impact of the rise in crude oil, coupled with the tightening of supply sources, resulting in dual benefits for both the cost and supply sides of ethylene in the international market, resulting in a narrow range of strength in ethylene prices; Due to the weak trend last month, the price of vinyl acetate was at a low level at the beginning of this month. At the same time, the industry's operating conditions have declined, and the supply of goods in the calcium carbide method direction has been significantly diverted by polyvinyl alcohol enterprises, resulting in a gradual shortage of goods on site. The market momentum of vinyl acetate has increased, and the spot market has risen. This month, the market for EVA raw materials has both strengthened, increasing support for the EVA market.

In terms of supply: In July, the main pattern of the EVA industry's operating rate was low first and then high. Last month, there were multiple EVA enterprise installations undergoing maintenance. As we enter this month, the production line is gradually resuming work. In addition, EVA processing profits have improved, and the overall operating rate of the enterprise has gradually increased from 64%. By the end of the month, the total load position of the domestic industry is 83.5%, with a monthly average load of about 76.29%. In terms of production, there has been a synchronous increase, with a monthly production expected to reach 185400 tons, and the market supply is still acceptable. Factory inventory pressure is average, and factory prices are generally quite high. Traders are following the trend and there is a partial interest locking operation near the end of the month, causing a temporary deadlock in spot prices in the market. EVA suppliers' support for spot goods is acceptable.

In terms of demand: In the past month, the stocking atmosphere in the domestic EVA market has been mixed, and there has been differentiation in downstream market conditions in different directions. In terms of photovoltaic, the downstream has once again initiated phased stocking, with optimistic consumption of photovoltaic materials and smooth delivery, which is the main support for the downstream of EVA this month. On the other hand, the demand for foaming materials remains low. The follow-up of terminal enterprises lags behind, and the consumption of shoe materials and other aspects is at the off-season level, with low trading volume. Downstream foaming enterprises tend to maintain production in their stocking operations, resulting in a heavy market wait-and-see atmosphere and resistance to high priced sources of goods. On the demand side, there is a strong and weak support, and photovoltaic materials have a significant impact on the EVA price market.

Overall, the EVA market has performed positively in the past month. The strengthening of the raw material market has increased support for EVA spot sales. The overall increase in downstream demand has boosted EVA spot prices. The industry load position is moderate, the supply side maintains stability after a strong increase, and the supply side provides strong support for the market. In summary, the fundamentals of EVA in July were positive and the market trend was strong.

In the future, the current industry load is gradually increasing, and the accumulation of supply may cause some pressure on the market next month. In addition, merchants' arbitrage and shipment operations at the end of the month are relatively concentrated, resulting in stagnant market quotations. As the demand for photovoltaic materials in the future gradually increases, it is expected that the domestic market for EVA may enter a stalemate stage.

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