PVC inventory reduction and price rebound

Introduction to the report:

Spot prices across the country fell. As of May 6, the ex factory price of type 5 calcium carbide method in Northwest China was around 8600 ~ 8700 yuan / ton. The market price of five type calcium carbide method in East China is about 8920 yuan / ton, that in South China is about 9000 yuan / ton, and that in North China is 8600 yuan / ton. In terms of foreign markets, CFR China is USD 1310 / ton and CFR India is USD 1530 / ton. CFR Southeast Asia $1395 / ton. FOB Western Europe USD 2020 / ton. Fas Houston $1750 / ton.

The price focus of futures rebounded slightly during the week. The main contract opened at 8650, with the highest price of 8793 and the lowest price of 8573, closing at 8683 The basis strengthened to 237.7 in the week, and the difference between May and September was 297.

At the raw material end, calcium carbide in all regions remained stable. As of May 6, the price of Wuhai area was 4000 yuan / ton. 4490 ~ 4500 yuan / ton in Hebei, 4430 ~ 4580 yuan / ton in Shandong and 4350 ~ 4400 yuan / ton in Henan. As of the week of May 6, the operating rate of PVC enterprises was 82.46%, that of calcium carbide method was 83.29%, and that of ethylene method was 80.31%. In terms of inventory, the inventory of production enterprises has accumulated to 310000 tons, and the social inventory has gone to 300000 tons. The commencement of downstream pipes and profiles was at a year-on-year low affected by the epidemic.

With the end of the holiday, the epidemic situation in East China was suspended. In addition, the spot price fell significantly before the holiday. The price callback led some participants to make up the stock on bargain hunting, the social inventory decreased by 20000 tons, and the stock removal trend reappeared. For the follow-up market, we believe that the key lies in whether the trend of destocking can continue. From the supply side, some units resumed operation after maintenance, and the operating rate gradually picked up. In addition, the inventory of production enterprises is still accumulating. Overall, the supply is relatively sufficient. On the demand side, the good news on the macro side did not significantly stimulate the increase of downstream construction, so the downstream construction previously affected by the epidemic still needs time to be repaired. Overall, the supply is relatively sufficient, the recovery rate of demand is slow, and the trend of destocking is difficult to maintain in the long term. Therefore, we suggest to chase more carefully and pay attention to various underground swimming directions.

The support line of East China spot market is expected to be 8800 yuan / ton.