SunSirs: China PVC Market Fluctuated and Rose in August to Warm Up the coming of Peak Season

According to the data monitored by SunSirs (the average ex-factory price of calcium carbide method SG5), the mainstream average price of domestic PVC in August 27 was 6,565 RMB/ ton, up 1.19% compared with 6,487.5 RMB/ ton at the beginning of the month, 2.18% higher on a month on month basis, and 1.61% lower than the same period last year.

Market Analysis

In August, PVC market first rose, then fell and then rose, and the overall center of gravity began to move up. This month's rise was mainly driven by the strong volatility of PVC futures and the rising cost of raw materials. However, due to the constraints of consumption in the off-season, the upward range was not large, accompanied by a correction. The market fluctuated slightly, with a maximum amplitude of 2.41%, with an increase of about 150 RMB. Near the peak season, demand or will increase, PVC probably continue to fluctuate upward trend.

In terms of demand, this month is in the off-season of consumption, and the downstream is general. Due to the influence of flood season and typhoon, the construction of some enterprises in some areas has declined slightly. The real estate industry is still the main driving force of demand, and the macro trend is warmer. On the whole, the demand side is good and the support is still general, but the strength is weakened. It is about to enter the peak season in September, and the demand for PVC may be expected to increase.

In terms of supply, there are few maintenance enterprises this month, and there are many long-term shutdown devices. At the same time, some enterprises have reduced their load due to the influence of continuous rainstorm weather. The PVC output is affected to a certain extent, and the pressure at the supply end is not large, which plays a supporting role in the upward movement of PVC.

According to the latest data released by the National Bureau of statistics, in July 2020, the domestic PVC production was 1.664 million tons, up 4% compared with the same period last year; from January to July 2020, the cumulative domestic PVC production was 11.425 million tons, down 2.2% compared with the same period last year.

In terms of spot goods, as of August 27, the mainstream quotation range of domestic PVC5 carbide was around 6,350-6,700 RMB/ ton. At present, the mainstream of PVC5 type tourmaline in East China is around 6,600-6,700 RMB/ ton, while that in Changzhou is 6,650-6,730 RMB/ ton. The price of PVC5 type tourmaline in Hebei is 6,470-6,570 RMB/ ton. The price is adjusted in a narrow range. The ex factory price of goods from Inner Mongolia is increased by 6,250-6,350 RMB/ ton, while that of Hangzhou is 6,640-6,750 RMB/ ton. The quotation is up. The mainstream price of tourmaline is 6,630-6,750 RMB/ ton, and the center of gravity moves up.

In terms of futures, on August 27, the main contract 2101 opened at 6,680 RMB/ ton and closed at 6,650 RMB/ ton. The settlement price of the previous day was 6,695 RMB/ ton, down 0.67%. The trading range was 6,635-6,785 RMB/ ton, with 203,254 transactions and 203,929 positions.

Upstream crude oil, on August 26, the U.S. WTI crude oil futures market prices rose slightly, with the settlement price of main contracts at $43.39/ barrel, up $0.04. Brent crude oil futures market price fell, the main contract settlement price to $46.16/ barrel, down $0.13.

Under the support of cost, the external market of ethylene increased slightly. As of August 26, the price was $683.25/ ton. The market of ethylene in Europe and America is on the upward trend. The demand of the whole ethylene market is moderate, and the rising trend is not big.

The price of calcium carbide rose in August. As of t August 26, the price of calcium carbide was around 2,740 RMB/ ton. The low price consolidation of raw materials in the upstream has generally supported the price of calcium carbide, while the PVC market in the downstream has risen slightly recently. The downstream customers are generally enthusiastic about calcium carbide procurement, and the calcium carbide supply is normal. Calcium carbide rose slightly after the shock.

Market Forecast

PVC analysts believe that August PVC market ups and downs, the center of gravity began to move up, but the low-season downstream capacity to receive goods limited, inhibit the rise. In September, although the number of maintenance enterprises is decreasing, the demand side is gradually entering the peak season. The supply and demand pattern is relatively balanced, and there is no big contradiction. Under the situation of macro warming and strong futures fluctuation, China PVC spot market rate continues to fluctuate upward. It is also necessary to pay attention to the demand follow-up and the market trend.

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