PVC: Social inventory accumulated, cost support weakened, and the external market differentiated during the holiday

1. Brief description of the domestic PVC market

During the long spring holiday in China, the price of calcium carbide has fallen by a total of 100-150 yuan/ton during the festival, and the logistics and transportation were affected during the Spring Festival, and the shipment of calcium carbide enterprises is relatively slow, and the inventory has increased. Spot market: before the holiday on January 25 after entering the holiday mode, the regional spot market performance ran not well, the situation of “having high price while no market” was continued. At the first working day after the holiday, merchant offers were not much, some traders didn’t returned to the market, and futures have not opened, so the spot market performance is relatively calm. The spot offer price rose only in some areas before the holiday, but there was no transaction support, most of the downstream didn’t start productivity, the enthusiasm of spot market inquiry was limited, and the trading and investment atmosphere of the spot market was bleak.

Comprehensive price list of each region: CNY/Ton

2. Major events during the holiday

A: Hong Kong stocks rarely have 3 consecutive yangs and A50 index futures have risen

B: The Ministry of Housing and Urban-Rural Development: Nearly 5,000 enterprises have good news. The relevant person in charge of the Ministry of Housing and Urban-Rural Development recently said that in the future, China will transform more than 100,000 kilometers of underground pipelines every year. In 2024, China will vigorously promote the transformation of urban underground pipe networks, implement urban flood discharge and flood prevention capacity improvement projects, and further promote the construction of urban lifeline safety projects.

C: In January, the scale of both new social finance and RMB loans hit new highs

D: U.S. inflation has not cooled as expected. The US CPI on February 13 and the PPI growth rate on February 16 were both higher than expected. US CPI rose 3.1% year-on-year in January, expected rate was 2.9%, and it was 3.4% in December, core CPI rose 3.9% year-on-year, and it was expected to 3.7% , and it was 3.9% in December, and core CPI rose 0.4% month on month, and it was expected to 0.3%, and it was 0.3% in December. Rising housing prices were the most important reason. After the release of the data, the market's expectations for the Fed's interest rate cut retreated.

E: On Wednesday, February 14, Israel launched a large-scale attack on Lebanon. Israeli officials said that militants fired a series of rockets at an Israeli military base and a nearby city, killing one Israeli and wounding seven, before Israel carried out a series of massive strikes on Lebanese territory. The escalation threatens to undermine weeks-long negotiations to ease tensions in the region.

F: This week, the United States WTI crude oil futures have risen by more than 2%, and the settlement price of Brent crude oil futures has risen by about 1%. Oil prices rose under the increasing risk that the Israeli-Palestinian armed conflict would spill over into a wider conflict.

3. the outlook for the post-market

On the whole, although there were certain differentiation and changes in the external market during the holiday, it may not be able to show a good sustained impact on PVC. From the perspective of PVC fundamentals, the downward cost support of calcium carbide prices during the holiday weakened, and the starting load of PVC production enterprises during the festival was relatively stable, and basically at a high level, so the supply has increased. Entering the second half of February, the pre-holiday PVC performance continued to be weak, and on the basis of the fundamentals of no better performance, it was still difficult for the post-holiday market to have a good performance. However, for the overall 05 contract and the market before May, we still have a certain high point expectation, of which the futures high point is expected to be placed in the range of 6200-6300 contract, following the spot market price. Therefore, in the short term, the PVC futures and spot markets may still face pressure to continue to confirm the bottom price, but the medium-term performance may show a small continuous rise.