PVC 2601 Contract Analysis, Sep 24th

PVC Futures Analysis: On September 24th, the PVC2601 contract saw a narrow range of price fluctuations in the evening session, with the direction of the price fluctuation unclear. The trend of small fluctuations continued after the morning session, with a relatively significant increase in the afternoon price. However, after reaching a high of 4956, the price turned slightly lower.

The PVC2601 contract opened at 4899, reached a high of 4956, and a low of 4869, with a spread of 87. Positions decreased by 12,387 lots, leaving 1,111,748 lots open. The settlement price was 4903, down 52 from yesterday's settlement price of 4903. Daily trading volume was 902,670 lots, with deposits of 3.828 billion yuan and outflows of 20.62 million yuan.

Regional Price Summary: Yuan/ton

PVC Spot Market: The mainstream transaction prices in the domestic PVC market showed mixed trends, with a slight decline in the morning followed by a slight increase in the afternoon. Comparing price assessments: North China saw a 10 yuan/ton increase, East China saw a 10 yuan/ton increase, South China remained stable, Northeast China saw a 10 yuan/ton increase, Central China saw a 10 yuan/ton increase, and Southwest China saw a 30 yuan/ton decrease. Ex-factory prices for upstream PVC manufacturers remained stable in some regions, while others saw slight decreases of 20-30-50 yuan/ton. Due to the low futures price, upstream manufacturers were volatile in their quoting.

The spot market fell in the morning, creating a sluggish market atmosphere. However, in the afternoon, as futures prices rose, prices recovered and continued to rise slightly by 10-20 yuan/ton. Basis adjustments were minimal. Basis quotes for the 01 contract in East China were -110, -150, -220, in South China -100, -200, in North China -400, -430, -470, and in Southwest China, with some sources, the 01 contract was -280-480-660. After the afternoon spot price adjustment in both markets, spot market activity weakened.

PVC Market Forecast:

Futures: PVC 2601 futures prices saw a significant rise in the afternoon, failing to decline from yesterday's level, indicating a temporary downward trend. Overall commodity sentiment improved in the afternoon, with the cultural commodities index rising.

The PVC futures price trend mirrored that of cultural commodities, demonstrating that even with relatively consistent overall commodity sentiment, a separate market trend can only emerge with unique fundamentals. Technically, the Bollinger Bands (13, 13, and 2) continue to trend flat, and the daily KD line remains in a death cross. Recent market volume fluctuations have been minimal, with both long and short positions remaining largely dormant. In the short term, futures prices will likely fluctuate within a wide range of 4850-5050.

Spot: Overall commodity sentiment improved in the afternoon, with most major domestic futures contracts seeing gains at the midday close. Glass prices rose nearly 5%, fuel oil rose over 3%, and container shipping lines to Europe, polysilicon, and soda ash rose over 2%.

PVC futures also rose, but the surge was unsustainable. The stock market showed a positive upward trend, with the Shanghai Composite Index up 0.83%, the Shenzhen Component Index up 1.8%, and the ChiNext Index up 2.28%. 

Looking back at market trends in 2024, commodity prices began to show a turning point since policy measures began on the 24th. However, domestic policy news has yet to provide a clear guiding force. Furthermore, PVC supply and demand factors are providing insufficient guidance on prices. Overseas, crude oil futures rebounded after a four-day losing streak, as recent geopolitical support offset the impact of oversupply.

Furthermore, negotiations on an agreement to resume oil exports from Iraqi Kurdistan have encountered obstacles, alleviating some investors' concerns about global oversupply. In the short term, the spot market will likely remain range-bound until a further turning point is seen.

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