SunSirs: Pressure from Supply-demand Contradiction, China EVA Market rapidly Declines

Recently, the domestic EVA market has been fluctuating and weakening, with a concentrated decline in spot prices last week. According to the Commodity Market Analysis System of SunSirs, as of December 17th, the benchmark price of EVA in China was 11,700 RMB/ton, a decrease of 4.36% from the beginning of the month and a weekly decrease of 5.14%.

In terms of raw material ethylene, the contraction of domestic spot circulation eased at the end of last month, and the current favorable situation is exhausted. Due to the lower intention of downstream industries to purchase goods at the end of the year, the flow of goods on site is not smooth. At the same time, distant oil prices fluctuated and fell, while ethylene fell due to various bearish factors. It is expected that the future market trend may continue to be weak;

Although the vinyl acetate industry is still in the traditional off-season, there has been no significant increase in demand. But recently, the supply has been tight, and the actual price of on-site trading has been high. Manufacturers and merchants have maintained stable pricing. Upstream glacial acetic acid and ethylene fluctuated, with overall support being mediocre. Last week, the market for EVA raw materials fell and remained stable, providing moderate support for the EVA market.

Since early December, the load level of domestic EVA enterprises has continued to rise. The industry's operating rate has increased from around 80% at the beginning of the month to the current 87%, with weekly production increasing simultaneously and market supply remaining abundant. The mentality of the petrochemical plant is weak, and the factory price has been lowered. The maintenance plan for future equipment is insufficient, and the shipment volume will remain at a relatively high level. The overall inventory position of EVA is on the rise, and merchants tend to offer at a discounted price. Overall, recent EVA suppliers have shown poor support for spot goods.

Last week, the demand side of EVA showed weak performance. The new quarter orders for foam shoe materials have limited impact on the driving force of trading, and the purchasing level of photovoltaic enterprises is lower than expected. On exchange trading is concentrated on low-end offers, and the logic of buyers buying on dips remains unchanged. Lack of market buying sentiment and resistance to the return of high priced goods.

Overall, the EVA market has been consolidating after a decline last week. The raw material market provides moderate support for EVA spot prices. The industry load has returned to a high level, and downstream demand is weak. Market confidence has been hit, and the profitability of enterprises has significantly declined. At present, some petrochemical plants have reduced their order operations, but there is no expectation of supply side contraction or signal of increased consumption in the future, making it difficult for the market to change the bearish guidance situation. It is expected that the EVA market will remain weak in the short term, and it is recommended to closely monitor the load situation of enterprises.

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