20241213-冠通期货-PVC_震荡下行_3页_474kb

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【Coranto Research】PVC: Downward Trend Observation
Date: December 13, 2024

【Strategy Analysis】
Maintain light positions for bearish PVC ethylene cracking contracts with minor losses, but note higher-than-average profitability from caustic soda. Overall chlor-alkali plant profitability persists.
In terms of supply, the PVC production capacity utilization rate has decreased by 207 basis points to 7,950%, staying near historical highs for this time of year. Downstream demand shows limited improvement and remains in a relatively low position year-over-year, primarily driven by just-in-time purchasing.
India's anti-dumping policy preliminary ruling raises concerns about potential domestic export barriers. Taiwan's Taipower has lowered FOB quotations for December shipments by $10/ton, indicating a cautious market stance.
Originally scheduled for December 4, India's anti-dumping tax and BIS certification conference got postponed, leading to market uncertainty about continued certification delays. Social inventories slowed their drawdown in October and remain at year-high levels; while last week saw a slight decline, the inventory pressure remains substantial.
Real estate data for the first ten months shows marginal improvement, but investments, new starts, and construction fell further, while the decline in completed floor area remains deep. The 30 major Chinese cities' commercial property sales dropped again in the most recent week, missing the prior positive momentum. Monitor the sustainability of real estate policy incentives stimulating sales.
Alongside increased exchange delivery stock quotas and high inventory levels, limited downstream purchases and cooling temperatures restricting processing further weigh on sentiment, yet the Politburo's emphasis on proactive fiscal and moderately loose monetary policies, including extraordinary counter-cyclical adjustments, has boosted market morale. Nonetheless, immediate downstream trading volumes remain low.
Recommend holding bearish positions on PVC with lighter weight.

【Price and Basis】
Futures: The PVC2501 contract experienced reduced volume but a downward price trend, touching 5,002 RMB/ton before recovering slightly to close at 5,023 RMB/ton (down 0.67%). Trading volume lessened by 32,462 lots, ending at 668,849 lots.
Basis: On December 13, the benchmark price for ethylene-based PVC in the East China region stabilized at 5,025 RMB/ton, resulting in a basis of 2 RMB/ton versus the V2501 contract (5,023 RMB/ton). The basis showed a slight increase of 53 RMB/ton, maintaining a neutral position.

【Fundamental Tracking】
Supply: Reduced operating capacity due to maintenance at Ningbo Hanhua and Tianjin Daghu led to the PVC capacity utilization rate decline to 7,950%. New capacity additions from 2024 mainly include Zhejiang Zhongyang's 300,000-ton project and Shaanxi Jintai's phased releases.
Demand: Real estate data shows slight improvements but investment indicators continue to decline. National figures for real estate investment, new home sales, and floor area data reveal significant year-over-year drops (e.g., investment fell 10.3%, sales area decreased 15.8%, completed floor area cut by 23.9%). Sales slowed within the last week in major cities.
Social inventories remain at years-high despite slow digestion post-October; recent declines were modest.
Economic data suggests a prolonged period before significant real estate recovery.

Disclaimer:
Information originates from public sources and is not verified for accuracy or completeness. Views expressed constitute opinion only and are not investment advice. Users bear responsibility for decisions based on this report.
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