PVC Futures: Oct 29 Analysis
PVC Futures Analysis: On October 29th, the PVC2601 contract opened slightly higher in the night session, followed by a narrow range of adjustment. The morning session saw minor adjustments based on the night session price, with relatively small fluctuations. Prices rose in the afternoon, with a significant increase towards the close. PVC2601 contract opening price: 4710, highest price: 4784, lowest price: 4709, price difference: 75, decrease in open interest: 43,828 lots, total open interest: 1,204,377 lots, settlement price: 4740, previous settlement price: 4727, up 13, daily trading volume: 840,023 lots. Evaporated funds: 4.026 billion yuan, outflow: 94.94 million yuan.
Regional Price Overview: Yuan/ton
PVC Spot Market: Domestic PVC market mainstream transaction prices rose slightly, especially in the afternoon with a significant increase. Price comparisons show that prices rose by 10 yuan/ton in North China, 20 yuan/ton in East China, 20 yuan/ton in South China, 20 yuan/ton in Northeast China, 20 yuan/ton in Central China, and 20-30 yuan/ton in Southwest China. Upstream PVC producers mostly maintained stable ex-factory prices, with a few making small, tentative increases of 30 yuan/ton.
Futures prices saw narrow fluctuations, with a significant rise in the afternoon. The spot market saw a slight, tentative increase of 10-20 yuan/ton in the morning, and the afternoon saw a general upward trend. However, after the futures price rose, the price advantage disappeared, and the basis adjusted in some cases: in East China, the basis for the January contract was -(50, -100, -150); in South China, -(0, 20, -50); in North China, -(310, -370); and in Southwest China, some sources had a basis of -(210, -330). After the price increase in the afternoon, the enthusiasm for inquiries in the spot market weakened, and downstream product manufacturers mostly adopted a wait-and-see approach in the face of the price hike.
PVC Market Forecast:
Futures Market: The PVC2601 futures contract saw a significant price increase in the afternoon, with the price breaking through the upper Bollinger Band resistance level. Wednesday's trading saw a significant reduction in open interest of 43,828 lots.
In terms of trading volume, short covering accounted for 24.1% compared to long covering for 26.7%. The increased long covering after the price rise indicates insufficient bullish momentum in the current market, with some profit-taking and some previously held positions being unwound.
Technically, the Bollinger Bands (13, 13, 2) have widened from a narrowing state, with the middle and upper bands starting to turn upwards. The daily KD and MDCD golden cross trends are expanding. The price increase at the end of the day has relatively moved away from the low range. In the short term, the price is expected to fluctuate within the 4710-4820 range after the price increase.
In the spot market: Firstly, regarding news from various sources on the 29th: 1. The "15th Five-Year Plan" recommendations: Adopt unconventional measures to promote decisive breakthroughs in key core technologies across the entire supply chain, fully implement the "Artificial Intelligence+" action, and vigorously boost consumption.
The "15th Five-Year Plan" recommendations mentioned finance 17 times. 2. A press release/official document is expected in early November, with substantial progress expected in combating involution. At midday closing, most domestic futures contracts rose. Currently, there are few variables in the PVC supply and demand situation, including stable prices for semi-coke and calcium carbide.
International oil prices fell for the third consecutive trading day as investors assessed the impact of US sanctions on Russia's two major oil companies on global oil supply, and the pressure from potential production increases by OPEC+ in December. Overall, the PVC spot market is expected to perform slightly better in the short term.
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