this year is to go strong expectations vs weak reality logic. January-early February in the macro-strong and cost support under the rise. On the basis of stable growth, monetary and fiscal policies, such as marginal easing of real estate policy to boost the formation of commodities. In mid-to-late February, the market returned to fundamentals. PVC started to pick up, and demand-side recovery takes time, inventory growth trend is continuous, the market logic back to weak reality. In early March, the geopolitical situation escalated, international crude oil rose rapidly, and commodities were given a boost. In addition, some overseas maintenance, crude oil costs rise, strong export performance. In the case of gradual recovery of domestic demand, PVC social inventory in mid-march to the warehouse inflection point. PVC fundamentals weak in April, with the development of the Shanghai epidemic, weak reality gradually become a trading logic, PVC shock drop. PVC weak fundamentals in May, although the start of the decline, but demand recovery is not expected, failed to appear in the peak season, in the second half of Taiwan plastic price cut exports expected to weaken, domestic spot continued to explore. At the end of May in Shanghai unsealed news stimulus and improved macro sentiment, disk again go demand expectations, short positions, PVC disk slightly rebounded.
Overall, short-term demand is expected to improve, export volumes remain strong overall, social inventory destocking trend, PVC fundamentals may improve as compared to May, and overseas energy prices fluctuate at a high level, add 7-8 traditional peak coal costs still have support, but it should be noted that the end of real estate is still expected rather than the industry’s actual improvement, exports may also start to weaken in June, the market is still expected to trade in the current, later recovery of domestic demand will be the focus. Operation Recommendations: SHORT-TERM PVC market atmosphere improved, but with the release of policy and recovery expectations, the surface will stabilize or a small correction, rising after the realization of expectations is not recommended to chase up, waiting for the timing of the correction into the market. Late key to see if demand can keep up, the third quarter in the cost and demand improvement under the price center of gravity to around 8500-9000.
Post time: Jun-15-2022