PVC Market Analysis Sep 10th
PVC Futures Analysis: On September 10th, the PVC2601 contract opened at a low of 4818 in the evening session, followed by a narrow range correction at the low. The futures price saw a slight rise in the morning session, but the increase was not significant.
It began to adjust around 4860, and continued to fluctuate slightly in the afternoon. The V2601 contract opened at 4850, reached a high of 4879, and a low of 4818, with a spread of 61. Positions decreased by 25,558 lots, leaving 1,266,528 lots. The settlement price was 4849, compared to yesterday's settlement price of 4864, a decrease of 15. Daily trading volume was 709,598 lots, with deposits of 4.306 billion yuan and outflows of 77.85 million yuan.
Regional Price Summary: Yuan/ton
PVC Spot Market: The mainstream transaction prices in the domestic PVC market fell slightly from low levels, and market sentiment remained weak. Comparing price estimates, prices fell by 70 yuan/ton in North China, 50-70 yuan/ton in East China, 50-70 yuan/ton in South China, 50 yuan/ton in Northeast China, 50 yuan/ton in Central China, and 50 yuan/ton in Southwest China. Ex-factory prices at upstream PVC manufacturers remained stable in some areas, with some experiencing slight decreases of 20-30 yuan/ton.
Ex-factory prices have generally fallen into a low range. Futures prices have hit new lows, approaching the lower support level. The spot market sentiment is negative, with traders in various regions quoting with volatile sentiment, leading to a slight price decline. The current trend in futures prices has led to a trading advantage in spot prices, with the basis narrowing slightly.
Basis quotes for the 01 contract in East China are -110, -180, -250; in South China -100, -200; in North China -360, -420, -460; and in Southwest China, with some sources offering 01 contracts at -330, 510, or 640. Spot prices and fixed prices coexist in the spot market, and downstream buyers continue to favor spot prices.
PVC Market Forecast:
Futures: PVC 2601 futures prices are fluctuating narrowly at low levels, breaking the lower end again and remaining within our projected range. The lower support level is temporarily holding, but with a bearish technical close, this support level will shift downward. Today's market saw a reduction in positions, with both long and short positions exiting, with short positions closing at 24.2% and long positions closing at 24.5%. Technically, the three Bollinger Bands (13, 13, and 2) on the daily chart continue to trend downward.
The KD and MACD lines on the daily charts have not shown any significant trend change. We maintain our previous view that futures prices may remain relatively sluggish in the short term, with the lower band of 4810-4820 as a support level.
Spot Market: At the midday close, the main domestic futures contracts saw mixed gains and losses. The cultural goods index weakened overall, with its low slightly below the lower band support level, indicating slightly negative commodity sentiment. Within the plastics sector, PVC, a 3P product, showed significant weakness.
PVC fundamentals have not seen any new significant factors in supply and demand, particularly those driving price fluctuations. Following the completion of PVC plant maintenance, supply has remained high and stable. This sluggish supply is the primary bearish factor constraining fundamentals, and demand has not seen significant changes at this time.
Overseas, oil prices rose after the Israeli military announced an attack on Hamas leaders in Doha, the Qatari capital, expanding its years-long military campaign in the Middle East. Overall, in the short term, the PVC spot market price may still be mainly consolidated at a low level, waiting for a turning point in news and policy guidance.
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