PVC Futures & Spot Trends
PVC Futures Analysis: On November 12th, the PVC2601 contract opened lower and then rose in the night session, with prices initially increasing slightly before consolidating and fluctuating within a narrow range. This trend continued into the morning session, but prices fell after reaching a high of 4598, and then adjusted at lower levels in the afternoon.
PVC2601 contract opening price: 4576, highest price: 4598, lowest price: 4572, price difference: 26, increase in open interest: 9204 lots, total open interest: 1397927 lots, settlement price: 4585, previous settlement price: 4591, down 6, daily trading volume: 499328 lots. Evaporated funds: 4.483 billion yuan, outflow: 20.8 million yuan.
Regional Comprehensive Price Overview: Yuan/ton
PVC Spot Market: Domestic PVC market mainstream transaction prices saw narrow adjustments, with prices mainly undergoing minor changes. Price comparisons show: prices remained stable in North China, fell by 10 yuan/ton at the high end in East China, fell by 20 yuan/ton at the low end in South China, remained stable in Northeast China, Central China, and Southwest China.
Upstream PVC producers maintained stable ex-factory prices in some areas, while others slightly lowered them by 20-40 yuan/ton. Currently, first-generation contract signings are weak, and even with a slight weakening of ex-factory prices, it hasn't led to improved transactions. Futures prices traded sideways in a narrow range at low levels, while spot market prices saw minor adjustments.
Merchants in different regions adjusted their offers slightly based on their own sales situation. Basis adjustments were minimal: in East China, the basis for the January contract was -(30, -40, -100); in South China, -(0, 20, 40); in North China, -(340, -380); and in Southwest China, some sources had a basis of -(190, -320). Even with these two pricing models, the spot market still saw no significant transactions, and downstream buyers remained unenthusiastic.
PVC Market Outlook:
Futures Market: The PVC2601 futures contract is trading in a narrow range at low levels. Firstly, the price fluctuation range is small, indicating a consolidation trend within a narrow range. Open interest decreased slightly on Wednesday, and trading volume remained relatively stable. Secondly, after reaching a low point, today's trading volume is lower than the previous period, indicating reduced market activity. Technically, the Bollinger Bands (13, 13, 2) show a clear downward trend from the lower band.
The daily KD and MACD lines continue to show a death cross trend. Furthermore, the bearish trend is not limited to the daily chart; the weekly and monthly charts also showed weak closing prices amidst a persistently sluggish market. Currently, there is insufficient stimulus from various market participants. We maintain our previous view that in the short term, the price movement within the low range of 4550-4620 should be closely monitored.
In the spot market: Firstly, looking at the fundamentals of PVC, the cost of calcium carbide is currently stable. While some PVC suppliers are still undergoing maintenance, most are operating at normal capacity, resulting in some inventory pressure at production plants.
First-generation contracts have relatively short delivery cycles. On the demand side, the low prices have dampened purchasing enthusiasm. Aside from essential needs, there is limited buying power for PVC raw materials, with most buyers placing orders at lower prices to replenish their stocks.
The fundamentals are providing insufficient guidance for price movements, and currently, there is no significant policy or news support. Although the focus is currently on the 15th Five-Year Plan, its implementation may not be seen until next year. Overall, the PVC spot market is expected to continue its low-level, narrow-range adjustment pattern in the short term.
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