PVC Weekly Report: Futures monthly spreads remain high, slightly sluggish, spot prices fell slightly during the week(December 19, 2024)

December 20, 2024, 11:24 AM

TDD

6555

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Highlights at a glance

This article analyzes the domestic PVC market from December 12 to 19, 2024, highlighting a downward price trend, factors affecting supply and demand, and an overview of futures contracts. It discusses the impact of low purchasing orders, shifting positions in futures, and the performance of the calcium carbide and ethylene-based PVC indices, providing insights into future market conditions.

I. Analysis of the domestic PVC market

1. Overview of the domestic PVC market
This week (2024.12.12-2024.12.19) The spot market price showed a slight downward trend in the overall comparison during the week, and futures continued to shift positions and change months. The rebound that occurred last week under the policy boost was reversed this week, and the market weakened. Influencing factors during the week: 1. The 2501 contract futures continued to shift positions and change months, but in the overall market trend, the monthly spread between 2501 and 2505 contracts has always remained above 300 points, which is not conducive to the shifting of long positions. On the one hand, the long positions will face a loss of 300 points in the early stage of shifting positions, and on the other hand, the current market is still slightly bearish. 2. At the supply and demand level, the operating load of the calcium carbide method of PVC units did not change much during the week, and the ethylene method declined significantly due to maintenance of some enterprises. 3. In terms of demand, the purchase frequency of downstream demand parties has not changed, and they still maintain low orders for rigid demand. The seasonal off-season demand characteristics are relatively obvious, and the spot market transactions are always dominated by small orders. 4. Taiwan Formosa Plastics' price for January 2025 was reduced by 20-25 yuan/ton, mainly affected by sufficient market supply and expectations of rising sea freight rates. 5. There was no policy guidance during the week, and commodity sentiment also began to weaken during Wednesday and Thursday. Overall, the performance of the futures and spot markets during the week was poor, and the reduction in positions presented by the transfer of positions and the change of months still had a far-reaching impact on the spot market. From the comparison of valuations, the North China region fell by 70 yuan/ton, the East China region fell by 15 yuan/ton, the South China region fell by 25 yuan/ton, the Northeast region fell by 20 yuan/ton, the Central China region fell by 75 yuan/ton, and the Southwest region rose by 15 yuan/ton.

2. Forecast for the future market

Futures: PVC2501 contract price continued to reduce positions and transfer positions to change months during Thursday, but the downward trend of the futures price was relatively obvious during Thursday, and the overall atmosphere was relatively sluggish. The technical level showed that the three tracks of the Bollinger Bands (13, 13, 2) narrowed significantly, the KD line at the daily level crossed, and the distance between the two MACD lines shortened. The corresponding 2505 contract showed a state of substantial increase in positions. In terms of the transaction of the 2505 contract, 26.9% of the short positions were compared with 24.9% of the long positions. At present, the trend of the 05 contract has basically become the traction of the 01 contract. In the short term, the operation of the futures price may still be under certain pressure. Observe the performance of the 2501 low range 4950 and the 2505 contract 5250.

Spot: In the market of shifting positions and changing months, the market formed by reducing positions may be out of the fundamentals from the perspective of empiricism, but after the current position is quickly converted to the 05 contract, it is still dominated by short positions. Therefore, the guidance of the spot market is slightly sluggish. In addition, there are still certain contradictions between the supply and demand sides of the spot market. The rebound caused by the policy side in the operation of the futures and spot markets has also been spit out this week. The current commodity operation is relatively obvious. The policy guidance will form a certain upward trend, but it will return to the fundamentals after cooling down. In the case of weak fundamentals of PVC, the market is still dominated by short positions, and the spot market also shows certain operating pressure. In the short term, the narrow adjustment mode of the PVC spot market remains unchanged, or a certain direction will appear after the shifting of positions and changing months is completed.

3. Domestic PVC Index

According to Tu Duoduo data, the domestic calcium carbide PVC spot index was 4975.56 on December 19, down 33.60 from the same period last week, a range of 0.671%. The ethylene-based PVC spot index is 5250.43, down 39.11 from the same period last week, a drop of 0.739%. The calcium carbide index fell, the ethylene index fell, and the price difference between the ethylene-calcium carbide index was 274.87.