1、 Price trend
According to the data monitored by the business agency (the average ex factory price of calcium carbide method SG5), on July 23, the mainstream average price of PVC in China was 6487.5 yuan / ton, up 3.8% compared with the beginning of the month, 2.98% higher than that of the previous month, and 3.64% lower than that of the same period last year.
2、 Market analysis
In July, the PVC market first rose rapidly, all the way up, and then began to moderate callback after the middle of the year. The stronger futures in this month led to a strong rise in the spot market. However, under the condition of insufficient follow-up at the lower demand side and no significant change in fundamentals, the continuous rise lacks support. After a continuous increase of 5.36% in the first ten days of July, it is normal for the PVC market to enter into a rational callback stage, but the range of adjustment is not large, and the manufacturers’ attitude of supporting prices remains unchanged. Recently, the spot market of PVC has stabilized, and the rainy weather in the South has restrained some demand. Therefore, the market trading is relatively flat. Some manufacturers sell goods at a profit, and most of the downstream companies supply goods on demand. Due to the tight supply of goods in some areas, the pre-sale is good, and the operators have a calm and wait-and-see attitude. At present, the demand side support is still in place, and the social inventory is also continuing to be removed. In addition, there are good supports such as maintenance by manufacturers, tight local supply and rising costs. It is not easy to be too pessimistic for a short-term rational callback.
On the spot, according to the data monitoring of the business agency, as of July 23, the mainstream quotation range of domestic pvc5 type calcium carbide was around 6350-6650 yuan / ton. At present, the mainstream price of pvc5 type calcium carbide in East China is around 6500-6600 yuan / ton, that in Hebei is 6420-6500 yuan / ton, that in Hangzhou is 6520-6600 yuan / ton, and that in Guangzhou is 6620-6680 yuan / ton, with a slight decrease in quotations.
In terms of futures, the V2009 contract opened at 6545 on Thursday, with the highest price of 6630, the lowest price of 6520 and the closing price of 6540, down 55 or 0.83%. The trading volume was 164000 hands, an increase of 41000 hands. The position was 162000, decreased by 2440.
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In terms of demand, July is in the off-season of consumption, and the downstream enterprises are generally in general. In addition, in the rainy season in the south, the downstream enterprises’ operating rate has declined. They do not stock up a large number of PVC products which continue to go up. Their enthusiasm is not high. They mainly focus on just needed procurement, and a small amount of replenishment. The start-up of enterprises such as pipes and profiles is at a medium level. The demand of medical industry is good, and other product industries still perform poorly. Overall, PVC market demand has fallen, but the support is still in, only the strength is weakened.
Statistical data show that from January to June, the cumulative apparent consumption of PVC reached 10.051 million tons, which was 0.55% lower than that of 10.1065 million tons in the same period of 2019. The average monthly apparent consumption was about 1.6752 million tons, slightly higher than the same period last year.
In terms of supply, there were not many maintenance and repair enterprises in July, and the early maintenance enterprises had resumed work, the output was increased, and the market supply pressure was not great. The supply of goods in South China was still tight, and there was no pressure on sales. Most manufacturers were pre-sale orders, and their confidence in supporting prices was enhanced. With the arrival of imported goods in the later period, maintenance enterprises resume production, increase production capacity, and put in new production capacity, the supply is increasingly abundant.
According to the latest data released by the National Bureau of statistics, in June 2020, the domestic PVC production was 1.631 million tons, up 2% compared with the same period last year; from January to June 2020, the cumulative domestic PVC production was 9.688 million tons, down 3.2% compared with the same period last year.
Crude oil: on July 22, the price of WTI crude oil futures market in the U.S. fell, with the settlement price of main contracts at $41.90/barrel, down $0.02. Brent crude oil futures market prices rose, with the settlement price of main contracts at $44.29/barrel, down $0.03. Oil prices remained almost unchanged on Wednesday, after data released by the American Petroleum Association (API) showed an unexpected increase in US crude oil inventories, and Wednesday’s EIA data also showed an unexpected increase in crude and distillate stocks. In addition, tensions between China and the United States have risen.
Ethylene, the overall trend of ethylene is rising slightly in the near future. As of July 22, CFR closed at $795-805 per ton in Northeast Asia and $700-710 in South East Asia. The market price of ethylene in Europe is FD, northwest Europe closed at 754-764 US dollars / ton, CIF northwest Europe closed at 695-703 US dollars / ton. The price is 335-353 US dollars / ton. Generally speaking, the recent market situation of ethylene in Europe and America is mainly stable and rising, the demand of the whole ethylene market is fair, the trading atmosphere is general, and the increase is small. Oil prices continued to fluctuate in a narrow range at $40, and the market was in a state of anxiety. The implementation rate of production reduction in many countries exceeded 100%. This is the supply and demand side of the Lido bottom crude oil market. The formation cost of ethylene is supported, and the ethylene price is currently at a low level, so the data analysts of the business agency expect that the ethylene price will mainly rise next.
Calcium carbide, in late July, calcium carbide market fluctuated slightly and rose mainly. As of the 23rd, the main calcium carbide manufacturer’s factory quotation was 2530 yuan / ton, up slightly. The price of raw materials in the upstream is low, which generally supports the price of calcium carbide. Although the downstream PVC market has declined, the decline is limited. The downstream customers are generally enthusiastic about purchasing calcium carbide, and the calcium carbide production capacity is insufficient at this stage, and the supply of calcium carbide is relatively tight. The later market forecast that the price of calcium carbide in Northwest China will rise slightly in late July.
3、 Future forecast
PVC analysts of the business club believe that the current PVC futures fluctuate and fall, and the spot market fluctuates slightly. Some enterprises make profits to ship goods, and the transaction atmosphere turns weak. Although the demand in the off-season is not high, the support is still there, and the short-term maintenance is still good. It is expected that the trend of PVC will fluctuate slightly, and it is possible to continue to callback. It is also necessary to pay attention to the futures trend.