1. Price Trend
According to data from SunSirs (average ex-factory price of calcium carbide method SG5), the average domestic mainstream PVC price was 6,850 RMB / ton on January 6, which was 0.36% lower than the average domestic mainstream PVC price of 6,825 RMB / ton on the weekend (10th). Compared with the number that in the same period last year, it increased by 5.41 %.
On January 10, the PVC commodity index was 86.48, which was the same as yesterday. It was 13.52% lower than the highest point of the cycle at 100.00 (2011-Septmber-05) and 48.41% higher than the lowest point of 58.27 on December 20, 2015. (Note: Period refers to 2011-Septmber-01 to present)
2. Market Analysis
Products: The overall PVC market was weak this week, with prices falling slightly. The recent US-Iraq conflict has caused a narrow volatility of futures trading. The spot market begun to weaken steadily, and the heat of market gradually receded.
The Spring Festival, which is the most important holiday for China, is approaching. The downstream factories are going on holiday one after another, and the goods were not actively stocked as before. Basically, the demand was just maintained. In the face of high-priced PVC for a long time, the downstream products industry began to feel tired. At this stage, social inventory has increased, downstream demand is weak. Merchants are under pressure to ship. The actual trading is average, and the market as a whole is weak.
Up to January 10, the mainstream price range of domestic PVC is 6,600-6,950 RMB / ton. At present, the mainstream of PVC5 type calcium carbide in Changzhou is 6,850-6,950 RMB / ton. The range of PVC5 type calcium carbide in Hangzhou area is 6,750-6,950 RMB / ton. And the mainstream price of PVC ordinary calcium carbide in Guangzhou area is around 6,850-6,920 RMB / ton. Prices around the world remained stable and fluctuated slightly.
Futures: The recent US-Iraq conflict caused a narrow range of futures trading. The main PVC contract of V2005 fluctuated higher and closed at 6,620 RMB / ton, which was +105 RMB from the previous trading day. The trading volume was 128599 hands, +27528 hands; 42080 lots, with a basis difference of 200 RMB, -105 RMB; 5-9 spreads of 45 RMB, +10 RMB.
Industry Chain: Affected by news from various sources, although the US-Iran conflict has temporarily released a signal of easing, contradictions still exist. And there is some uncertainty in the direction of the situation.
Crude oil will continue to fluctuate widely in the short term, and ethylene prices will rise. Calcium carbide aspect, after the price correction in December, the capital return of each plant was in good condition. The equipment was finished overhauled, and the production capacity increased. The ex-factory price of calcium carbide in the northwest region is temporarily stable this week.
Industry: In the first week of 2020 (January 6-10), the commodity prices of the rubber and plastic plate in the commodity price list were 4 types, and the top 3 products were PC (4.38%), Butadiene rubber (0.67%), natural rubber (0.55%). There were a total of 6 types of goods that were down from the previous month. The top three products were PP (-0.86%), HDPE (-0.85%), and nitrile rubber (-0.82%). This week the average increase was 0.16%.
3. Market Forecasting
SunSirs PVC analysts believe that the current PVC social inventory has increased. Downstream demand is weak. And merchants are under pressure to ship. Some of transactions have shifted their focus in lower stage. As the end of lunar year approaches, downstream factories are gradually entering on holiday and demand-side support is weak. It is expected that PVC will be under bearish pressure in the short-term.
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