PVC Aug 1 Futures & Spot View
PVC Futures Analysis: On August 1st, the PVC 2509 contract opened in a narrow range of price fluctuations. This trend continued in the morning session, followed by a slight weakening, and further declines in the afternoon, consolidating at a low level.
The V2509 contract opened at 5040, with a high of 5069 and a low of 5001, a spread of 68. Positions decreased by 9,641 lots, leaving open interest at 766,852 lots. The settlement price was 5040. Yesterday's settlement price was 5100, a decrease of 60. Daily trading volume was 951,213 lots, with deposits of 2.692 billion yuan and outflows of 47.98 million yuan.
Regional Comprehensive Price List: Yuan/ton
PVC Spot Market: The mainstream transaction prices in the domestic PVC market declined slightly, and on-site trading weakened. Comparing price estimates, prices fell by 30 yuan/ton in North China, 30 yuan/ton in East China, 20-30 yuan/ton in South China, 30 yuan/ton in Northeast China, 30 yuan/ton in Central China, and 30 yuan/ton in Southwest China.
Ex-factory prices at upstream PVC manufacturers remained stable in some regions, while others saw slight reductions of 40-50, 70-80 yuan/ton. Some companies saw significant reductions to facilitate better transactions and reduce inventory.
Futures prices remained weak at low levels, with spot market bids declining slightly and weakening further in the afternoon. Basis spreads narrowed, with basis spreads ranging from 100-150 yuan in East China, 50-100 yuan in South China, and 350-400-450 yuan in North China. In Southwest China, some sources saw prices ranging from 300-480 yuan for the 09 contract.
Following the decline in futures prices, inquiries in the spot market increased, and the price advantage was relatively clear. Downstream product manufacturers are urgently replenishing inventory with small orders, and trading has improved compared to previous high prices.
PVC Market Forecast:
Futures: The PVC 2509 contract price is testing the "5" digit, as expected. Friday's low of 5001 narrowly missed the range, and small-scale position reductions are also causing capital outflows. Now that August has arrived, the main contract is facing a month-end rollover. On the one hand, the month-end rollover market is volatile, making participation less attractive.
On the other hand, the influence of news and policy on the month-end rollover market may lead to volatile price fluctuations, so participate with caution. Technically, the Bollinger Bands (13, 13, and 2) are showing signs of narrowing. The daily KD and MACD lines have all formed a death cross. In the short term, futures prices may remain low, and we will continue to monitor the support of the "5" digit.
Spot: The Cultural Commodities Index weakened slightly on Friday. At the midday close, the main domestic futures contracts saw more gains than losses, further weakening commodity sentiment. Both the PVC futures and spot markets are facing some pressure.
However, the decline in futures prices has triggered an improvement in trading. Spot quotes offer a price advantage, while fixed-price quotes are difficult to execute at high prices. Trading has been sluggish within the previously high price range, leading to a recent increase in social inventories and further pressure on supply and demand. While inquiries have increased following the decline in futures prices, inventory levels cannot be quickly depleted.
PVC still lacks strong fundamentals, providing limited support for both futures and spot prices. Oil prices have fallen, following three consecutive days of gains, due to an unexpected increase in US crude oil inventories and the OPEC+ production increase projected for September. Overall, spot market prices are likely to remain range-bound at a low level in the short term.
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