The PVC market fluctuates down

Domestic demand declines, export window closed

Domestic demand declines, export window closed

On June 4, the mainstream price of five-type PVC spot prices in the East China market was 9200-9300 yuan (ton price, the same below), a narrow 50 yuan drop from June 2
.

"Affected by factors such as weakening domestic demand, closed export windows, and increased supply expectations, domestic PVC prices are expected to fluctuate downward in June, and the downward
adjustment space may be within 500 yuan .

" Longzhong Information PVC analyst Yang Rongrong analyzed

Declining domestic demand

　Declining　domestic demandDeclining domestic demand

June to July is a small off-season for PVC demand
.

Due to the rapid and large increase in the early price of PVC, the production profit of PVC downstream processing enterprises has been poor

"East China and South China are the main consumption areas of domestic PVC
.

At present, due to the power

"Recently, there have been power curtailments in Guangzhou, Dongguan, Foshan and other places
.

Depending on the size of the company, the degree of power curtailment is different.

Since about 20% of Guangdong's electricity comes from Yunnan, only a significant increase in precipitation after June in Yunnan will be able to ease the pressure on hydropower supply, and it will be difficult to relax restrictions on the Guangzhou epidemic in the next two or three weeks
.

The unexpected occurrence of PVC inventory in South China last week also shows that local demand has indeed been affected to a certain extent

Overall, the demand for PVC in South China in June may have been suppressed
.

　　Exit window closed

　Exit window closed　Exit window closed

　　In June, Southeast Asia was in the off-season of seasonal demand, the foreign PVC market was negative, export dividends faded, and the domestic PVC export market would also weaken
.

　　"India is the world's largest PVC importer
.

Due to the rapid deterioration of the epidemic, demand will inevitably decline, and the unstable domestic demand has also created a greater impact on external PVC prices

　　"Currently, the number of new export orders received by trading companies is not particularly large.
The export window has been closed, and some of the previous export orders were basically delivered from March to May.
It is expected that the delivery volume of PVC export orders from June to July will continue to decline.
Situation
.

" said Li Min, a PVC analyst at Zhuo Chuang Information

　　Supply expected to increase

　Expected increase in　supply 　 expected increase in supply

　　Entering June, most of the company's overhaul has been completed, superimposed on the release of new capacity, the overall operating rate of the PVC industry will increase, and the domestic PVC market supply is expected to increase
.

　　“As of June 6th, the production of PVC maintenance equipment has been resumed by Shaanxi Jintai, Lutai Chemical, Ordos, Xinjiang Zhongtai and other enterprises
.

However, fewer PVC companies have entered the maintenance, only Henan Shenma’s 300,000 tons/year installation.

　　Li Min analyzed that the supply and demand side of PVC in June may be weak, but there will be no particularly big contradictions
.
At present, the spot market is still in short supply, especially PVC in southern China is still in pre-sale status
.
If the raw material calcium carbide can fall back to around 8,500 yuan, some of the demand suppressed by high-priced raw materials in the early stage may be released
.
However, it will take some time for the supply side to go from tight to slightly loose
.

　　On the whole, the PVC market is in a downward trend recently, but the possibility of a sharp drop is unlikely
.

　　From the perspective of the futures market, both the weekly and daily levels are in a downward trend in the center of gravity
.
From a daily perspective, on June 4, the PVC settlement price was 8,717 yuan, a decrease of 180 yuan from June 1
.
It is expected that PVC spot prices will continue to be dragged down by the futures market
.