PVC Narrow Fluctuation Outlook
PVC Futures Analysis: On November 25th, the PVC2601 contract price rose slightly in the night session, followed by a narrow range adjustment. The price initially fell slightly in the morning session, but the decline was not significant before rising, although the increase was also small.
In the afternoon, the price fell slightly. PVC2601 contract opening price: 4496, highest price: 4525, lowest price: 4490, price difference: 35, decrease in open interest: 42314 lots, open interest: 1261508 lots, settlement price: 4508, previous settlement price: 4484, up 24, daily trading volume: 600685 lots. Evaporated funds: 3.966 billion yuan, outflow: 138 million yuan.
Regional Comprehensive Price Overview: Yuan/ton
PVC Spot Market: Domestic PVC market mainstream transaction prices mainly saw slight adjustments, while spot prices continued to rise. Price comparisons show that prices rose by 10 yuan/ton in North China, 30 yuan/ton in East China, and 30 yuan/ton in South China; prices remained stable in Northeast China; prices rose steadily by 30 yuan/ton in Central China; and prices rose by 30 yuan/ton in Southwest China. Upstream PVC producers made some tentative, small increases of 20 yuan/ton at their ex-factory prices, including some increases in prices from warehouses in other regions, while others remained stable and observed the market.
Futures prices traded within a narrow range, with relatively small fluctuations, but prices remained above 4500 for most of the day. In the spot market, both fixed-price and spot-price offers existed in various regions, but both methods resulted in poor transaction volumes.
Specifically, basis offers for the January contract in East China were -(0, 50, -70 or +20), in South China -(0, -30 or +20), in North China (-320, -340, -370), and in Southwest China, some sources offered -(160, -180, -300) for the January contract. The limited price fluctuations in futures prices meant that spot pricing lacked a competitive advantage, resulting in a quiet spot market today.
PVC Market Outlook:
Futures: The PVC2601 futures contract saw extremely narrow price fluctuations on Tuesday, with a range of only 35 points. While prices appeared to fluctuate, there was no clear direction. Recent capital outflows were also evident today, with open interest decreasing. In terms of trading volume, short covering accounted for 24.1% compared to long covering for 24.9%, indicating exits from both sides. Technically, the Bollinger Bands (13, 13, 2) remain downward sloping.
Currently, prices are consolidating in a narrow range at low levels, as is the cultural commodities index. There is insufficient guidance from fundamentals, policies, and news. We maintain our previous view that short-term price movements will be monitored within the 4450-4550 range.
In the spot market: First, let's look at the performance of the spot market. Traders in various regions report that there is no significant price advantage in spot transactions, and high prices are difficult to transact in. Downstream purchasing enthusiasm is not high, and spot transactions in the market are generally average. According to merchants in various regions, there is some mentality of bottom-fishing and stockpiling at current spot prices, but no action has been taken.
On the one hand, the timing is not right, as there is still a long time before the Spring Festival or March, and stockpiling would tie up funds for a long time. On the other hand, the overall market is still in a bearish state, and there are concerns that there is still room for further decline.
At present, there is still a mismatch and contradiction between supply and demand. The weakening demand and the abundant supply are unlikely to change in the short term. Overall, the spot price is expected to continue its narrow range adjustment pattern in the short term.
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