PVC Market: Price Fluctuations and Future Outlook
PVC Futures Analysis: On October 20th, the PVC2601 contract opened low and ended high in the evening session, with a relatively significant increase. However, the price weakened after reaching a high of 4746. The price fluctuated narrowly in the morning session, based on the closing price of the evening session, and fell slightly in the afternoon session.
The PVC2601 contract opened at 4696, reached a high of 4746, and a low of 4696, with a spread of 50. Positions decreased by 6761 lots, bringing the total open interest to 1,206,166 lots. The settlement price was 4721. Yesterday's settlement price was 4706, up 15%. Daily trading volume was 715,268 lots. Deposited funds: 3.97 billion yuan, and outflows: 10.37 million yuan.
Regional Price Summary: Yuan/ton
PVC Spot Market: The mainstream transaction prices in the domestic PVC market saw slight adjustments, with some shipments maintaining stable prices. Comparing price estimates, prices in North China rose by 10 Yuan/ton, East China by 10 Yuan/ton, South China by 10-20 Yuan/ton, Northeast China by 30 Yuan/ton, Central China by 20 Yuan/ton, and Southwest China by 10-50 Yuan/ton. Ex-factory prices at upstream PVC manufacturers generally remained stable, with no significant adjustments seen at the start of the week, and the market is primarily on the sidelines.
Futures prices were trading above 4,700 yuan this morning, with a slight upward trend at the night session high. However, weaker prices in the afternoon led to a slight divergence in the spot market. Some traders tentatively raised prices by 10-20 yuan/ton during the morning session. Basis quotes and fixed prices coexisted in the spot market, with minimal basis adjustments.
Basis quotes for the 01 contract in East China were 01 contract - (30, -100, -130), for the 01 contract in South China - (0, 20, -50), for the 01 contract in North China - (280, -340, -380), and for some sources in Southwest China - (200, -330). Despite the coexistence of alternative quotation methods in the spot market, transaction volume remained largely unchanged.
PVC Market Forecast:
Futures: PVC2601 futures prices have seen small increases since reaching their lowest point of 4644 last Thursday. Today, Sunday, open interest showed little change, with the price showing a bullish candlestick with a long upper shadow throughout the day. Current price fluctuations suggest that directional factors are still insufficient, with the market relying on small position reductions for adjustments. Technically, the Bollinger Bands (13, 13, 2) are still trending downward, but the daily KD lines are crossing, and the MACD continues to show a death cross. We are now entering late October, but the futures market still lacks significant support. In the short term, futures price fluctuations will depend on the fluctuations in the lower range of 4670-4750.
Spot prices are relatively volatile. Without clear drivers, futures price fluctuations are driven solely by changes in positions, which in turn have limited influence on the spot market. While slight increases in futures prices can still lead to a tentative upward adjustment in spot prices, actual trading volume has not seen a significant shift, with the underlying price still being the primary driver.
Regarding data, the National Bureau of Statistics reported preliminary GDP figures for the first three quarters of 2019 at 101,503.6 billion yuan, a year-on-year increase of 5.2% at constant prices.
This growth rate may have fueled today's slight price increase. At midday close, the main domestic futures contract saw mixed gains and losses. PVC supply and demand have also remained relatively stable, though supply has recently decreased as some plants undergo centralized maintenance. Overall, the PVC spot market is expected to continue to fluctuate within a narrow range in the short term.
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