The probability of PVC market warming is too high

Since May, the price of PVC has fluctuated more due to the influence of the macro. In the context of high inflation expectations in the United States, commodities collectively experienced a wave of declines in early May. Among them, PVC gradually stabilized and rebounded after the sharp drop. The price of calcium carbide method was around 8750 yuan / ton, and the downstream began to show obvious willingness to receive goods. At present, the start-up load of PVC has increased slightly, and the demand side focuses on the resumption of work and production in the Yangtze River Delta region. In addition, the downstream sentiment was suspended after the low-price replenishment, and there was no sustained performance of rigid demand, and follow-up attention was paid to the recovery of demand.

Slight increase in operating load

As of the week of May 15, the start-up load of PVC production enterprises was 82.43%, an increase of 0.26% from the previous month. Among them, the starting load of calcium carbide method PVC was 83.83%, an increase of 0.72% from the previous month; the starting load of ethylene method PVC was 77.26%, a decrease of 1.43% from the previous month. On the whole, the overall start-up load of the domestic PVC industry has increased slightly.

In addition, judging from this year's energy consumption dual control policy, the policy will still make corresponding regulations and restrictions on high energy-consuming industries such as calcium carbide. However, judging from last year's experience, there will be no "one-size-fits-all" rectification this year, and a stable and rational promotion policy will impose certain restrictions on calcium carbide production. In addition, May is the regular maintenance period for the PVC industry. Dezhou Shihua, Sichuan Jinlu, Shaanxi Beiyuan and other installations have relatively definite maintenance plans. However, some installations have been delayed in maintenance this year due to the impact of the epidemic. If they can be carried out as scheduled, the PVC The market will have some support.

Theoretical export profits increase

Since the Federal Reserve announced a 50 basis point interest rate hike, the US dollar has hit a 20-year high, which has triggered depreciation of the euro, Chinese yuan, and Japanese yen to varying degrees. Foreign media said that in order to fight inflation, many central banks led by the United States are seeking to appreciate their currencies to help reduce inflation by lowering the prices of foreign products. Under this influence, non-dollar currencies basically have a certain degree of depreciation.

The latest external quotations show that the price of PVC in the Asian market has been slightly lowered, with CFR China at $1,300/ton, CFR Southeast Asia steady at $1,395/ton, and CFR India at $1,520/ton. Under the condition that the sea freight rate is basically unchanged, as of May 13, the spot exchange rate of the US dollar against the onshore RMB was 6.7863 yuan, the theoretical export profit increased slightly, the profit of Southeast Asia increased by 131 yuan/ton, and the profit of India increased by 88 yuan/ton. Ton. However, the actual transaction price of domestic export orders is not high. The mainstream quotation of FOB Tianjin Port is 1180-1210 US dollars / ton, and the actual profit is 0-250 yuan / ton. Taiwan's Formosa Plastics' June pre-sale quotation is expected to be announced this week, and the market is expected to fall in the range of 50-100 US dollars / ton.

From the perspective of the market outlook, the PVC floor market is the main processing accessory that opens up export space at home and abroad, and through the substitution of other materials, the penetration rate is accelerating globally. At present, my country is the main exporter of PVC flooring, domestic products are mainly exported, and PVC production enterprises have strong international competitiveness.

Order days are gradually increasing

Recently, the operating load of downstream sample enterprises was 57%, down 1.06% month-on-month and 5.54% year-on-year. Among them, the start of soft products was less than 56%, down 2.71% month-on-month and 13.43% year-on-year; the start of hard products was 57%, down 0.31% month-on-month and 2.06% year-on-year. On the whole, the start of hard products is better than that of soft products. At the same time, although the downstream construction in various regions weakened slightly month-on-month, the year-on-year gap in North China and South China narrowed, and the year-on-year gap in East China still remained. In the early stage, when PVC East China SG5 type fell to 8650 yuan / ton, there was centralized replenishment in the downstream, and the overall order days was at the level of 18.7 days, an increase of 0.62 days from the previous month. The number of order days has increased slightly, and the market has ushered in an inflection point. We will continue to observe the recovery of demand in the later period.

Based on the above analysis, the recent macro environment has become the main factor affecting the trend of PVC. At the beginning of May, the overall PVC operating rate maintained a downward trend from the previous month, focusing on the release of some speculative demand under the current price, and continuing to pay attention to the export price and whether the potential increment can be realized. At present, the basis of the PVC futures 2209 contract and the mainstream quotation in East China is stable at 150 yuan / ton. Although the demand-side orders have increased slightly, the impact of the epidemic and transportation on the market still exists. The author predicts that PVC long speculative demand and price game may guide the market balance. With the opening of the inflection point of resumption of work in the Yangtze River Delta, PVC demand will gradually be realized, and the probability of market warming is high.