SunSirs: China PVC Market Rebounded Last Week (December 22-26)

According to the monitoring of the commodity market analysis system of SunSirs, the PVC spot market stopped falling and rebounded last week (12.22-26), with a significant increase last week. As of last Friday, the average price of SG-5 PVC carbide method in China was 4,450 RMB/ton, an increase of 1.95% during the week.

Supply side: Last week, the atmosphere of speculation in the PVC spot market gradually strengthened, and last week, driven by the futures market, the spot market rebounded. The market performance has improved in terms of supply and demand. Last week, the PVC production rate slightly decreased, with some enterprises having a production rate of less than 50%. In addition, this is mainly based on the increase in trading volume and the improvement of market sentiment.

In terms of inventory, the market has maintained a high trading volume recently, and social inventory continues to decrease. However, considering the previously large basic inventory, the current spot supply side remains abundant.

On the cost side: Although the market price of calcium carbide has slightly decreased this week, the market is still in an upward trend, and calcium carbide is still at a high level in the stage. According to the monitoring of Business Society, as we enter December, calcium carbide still shows an upward trend, with a growth rate of 2.29%. The increase in downstream procurement volume has a certain stimulating effect, and PVC prices have rebounded.

The PVC analyst from SunSirs believes that there is sufficient PVC supply in the short term, and there is room for improvement in the operating rate of manufacturers in the later stage. The inventory of enterprises is still generally high, and it needs to be continuously reduced in the later stage. The rebound of short-term futures market is mainly due to the improvement of market sentiment, and the lack of sustained improvement momentum in PVC fundamentals. As downstream procurement returns to rationality, the positive support effect is not significant. We should be cautious about the magnitude of the increase.

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