PVC: the beginning of April started well upward trend

- Apr 17, 2019-

According to the observation of relevant institutions, the recent domestic PVC market price continues to go up, the mentality of participants improved, the market trading atmosphere is more active.

April is a month when supply and demand of PVC begin to change in a year, which has a great influence on the later trend.

Recently, PVC futures show a bullish atmosphere, and when the PVC futures delivery, 09 contract or more than 05 contract.

Spot prices continue to rise by this support, merchants bullish sentiment highlights, the market investment demand slightly increased.

So far, east China calcium carbide method 5 mainstream price in 6780-6880 yuan/ton, up 325 yuan/ton over the weekend last month, or 5%, south China calcium carbide method 5 mainstream price in 6830-6870 yuan/ton, up 310 yuan/ton over the end of last month, or 4.74%.

April got off to a good start.

Futures were sharply higher

From April, the value-added tax will be reduced by 3 percentage points, which has a small impact on PVC enterprises. However, this will stimulate the demand of PVC downstream. In the two weeks of march *, we experienced a wave of invoice competition caused by tax reduction in the downstream, resulting in low saleable inventory in the upstream.

Since the first quarter, the downstream demand is low, but under the stimulation of value-added tax, the order of PVC big factory increases successively, but affected by the low inventory, the futures begin to go up. At the end of march, an explosion occurred in jiangsu yancheng chemical city.

In addition, the recent news that half of the chemical industry parks in jiangsu will be closed, as well as the beginning of futures delivery, futures rose by this boost.

Driven by futures, PVC spot prices continue to go up.


Supply cuts will continue

PVC inventory shows the trend of small decline recently.

First, stock up more, dealers around the middle of march, because the news of the VAT, part of middlemen to stock speculation began operations, market investment demand increased, wait for chance, although social inventories are high, but the PVC big falling inventories, especially in northwest manufacturers inventory decline faster, some manufacturers because of low inventory and rotary header is not news, east China, shandong factory inventories fell more recently, the current inventory pressure is not big, the dips replenishment more downstream.

Again, in April PVC enterprises into the maintenance season, from late April the number of new maintenance enterprises will continue to increase, at that time, the social inventory will continue to decline, coupled with the gradual increase in downstream demand, supply will be gradually reduced.


Upstream calcium carbide prices are rising

The main raw material of PVC - calcium carbide price rise, since this year, calcium carbide market began to recover from a, from march continuous surge in the price of calcium carbide, mainly in Inner Mongolia, ningxia area parking/temporary small calcium carbide furnace, routine maintenance and ordos calcium carbide furnace, superposition recently because of the Inner Mongolia region power brownouts, calcium carbide enterprises start device is not stable, supply decrease, further influence in ningxia, gansu and other places, and phase of more small stove due to factors such as not complete formalities remained closed, calcium carbide business inventories to gradually reduce, price increases obviously, PVC enterprises purchasing mood more positive,

But the overall arrival of goods is not stable, began to price acquisition, coupled with part of the speculation factor, resulting in a continuous increase in the price of calcium carbide.

But with the rise of temperature, calcium carbide upstream coal prices began to fall, calcium carbide prices will tend to stabilize in the downward trend.


Late market trend

At present, the market turnover greatly improved, with the spring maintenance increase, PVC social inventory will continue to decline, but the calcium carbide price will gradually stabilize, recent foreign demand performance is weak, the main market in India is not very positive, leading to a continuous decline in domestic exports.

PVC downstream floor enterprises started not high, export growth slowed down significantly, short-term inventory is still expected to increase.

It is expected that in the short term PVC market will narrow range shock finishing, in the medium and long term, the market will be upward trend, late need to pay attention to the stock, security, environmental protection and futures trend, it is recommended to operate carefully.