August 20th PVC Market Analysis
PVC Futures Analysis: On August 20th, the PVC2601 contract opened high and fell throughout the night session, with a slight decline. The futures price fluctuated narrowly within a low range during the morning session, with an unclear direction. In the afternoon, the futures price rose slightly, returning to above 5000.
The V2601 contract opened at 5006, reached a high of 5033, and a low of 4951, with a spread of 82. Opening prices increased by 20,013 lots, bringing the total open interest to 943,093 lots. The settlement price was 4989, down 30% from yesterday's settlement of 5019. Daily trading volume was 960,719 lots, with a deposit of 3.306 billion yuan and an inflow of 74.68 million yuan.
Regional Comprehensive Price Summary: Yuan/ton
PVC Spot Market: The mainstream transaction price in the domestic PVC market continued to decline slightly, with the decline narrowing in the afternoon. Comparing price estimates: high-end prices in North China fell by 20 yuan/ton, while prices in East China remained stable, South China fell by 10 yuan/ton, Northeast China remained stable, Central China remained stable, and Southwest China remained stable.
Ex-factory prices at upstream PVC manufacturers generally remained stable, with some companies experiencing slight reductions of 30 yuan/ton, primarily to clear factory inventories. Prices, including those from off-site warehouses, also declined. The futures market initially fell before rising, leading to a decline in spot market bids in the morning, which led to prices returning to a low range.
However, prices rebounded slightly in the afternoon, recouping losses and slightly adjusting the basis. Basis bids for the 01 contract in East China ranged from 230-270, in South China from 150-250, in North China from 420-500-530, and in Southwest China from 510-650 for some sources. Spot prices and fixed prices coexist on the spot market, but trading volume remains light for both methods, with no significant volume observed. Merchants are shipping small orders.
PVC Futures Forecast:
Futures: The PVC 2601 contract price has broken below the lower support level three times in a row. From a technical perspective, the daily KD and MACD lines continue to show a death cross trend, and the Bollinger Bands (13, 13, and 2) are diverging. In addition to breaking below the lower support level three times in a row, the price has also experienced six consecutive declines from its previous high.
The lower support level is not holding up. However, after the rollover, the futures price has fallen into the lower range. The price saw a slight increase in the afternoon. Our previous forecast of a support range of 4950-5000 is acceptable. Currently, most commodities have basically switched to 2601 as the main force. We maintain our previous view and continue to monitor the fluctuation support in the lower range of 4950-5000.
Regarding the spot market: First, let's examine market activity. High-priced bids are difficult to execute, and fixed prices continue to decline. However, as futures prices weaken, traders' basis offers offer some price advantages, and actual orders are primarily traded on spot prices.
While some urgent supply remains available at slightly lower prices, downstream purchasing activity remains modest, resulting in mediocre spot market activity. Secondly, judging by the current daily warehouse receipt data, 82,031 lots have been delivered.
The availability of goods after delivery continues to impact the spot market, and current supply and demand fundamentals remain weak. Price adjustments are still driven by hopes and policy shifts. However, from a short-term perspective, three consecutive declines below the lower limit may provide some support. Overall, the spot market may have bottomed out in the short term, but price adjustments will remain narrow.
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