China is the largest consumer and producer of chemical products. In this industry, my country has continuously broken through technological limitations and achieved many results. Just now, the chemical industry once again received good news.
According to the latest report from the media on Monday (July 5), statistics show that China’s PVC glove production capacity accounts for 90% of the world’s total, and 90% of my country’s PVC gloves are for export. In 2020, my country’s PVC production will reach 20.74 million tons, ranking first in the world.
In addition, there are many “firsts” in our country. In 2020, my country produced 894,000 tons of spandex, ranking first in the world. The output of dozens of bulk chemicals such as third-generation refrigerants, synthetic resins, glass fibers, methanol, soda ash, and tires also ranks first in the world.
The increase in the output of these chemical products has brought considerable benefits to my country’s chemical industry. Statistics show that in the first five months of this year, the chemical industry’s revenue was as high as 5.50 trillion yuan, revenue increased by approximately 32.8%, and profit was 507.69 billion yuan, an increase of 5.6 times. In addition, as of July 1, nearly 80% of A-share chemical companies expect their future performance to grow.
The achievement of such impressive results has benefited from the continuous improvement of my country’s chemical industry technology. my country has broken through the material technology barrier of 48K large tow carbon fiber, the king of new materials. The density of this material called “black gold” is lower than one-fourth of steel, and its diameter is only one-fifth of that of hair. One, but its strength can reach 7 times to 9 times that of steel. It can be widely used in the manufacture of fishing rods, badminton rackets, aircraft shells and wind power fan blades.
You must know that my country used to rely on imports for this technology. After years of research, it was finally able to get rid of the technological blockade. It is worth mentioning that Chinese companies are also constantly seeking breakthroughs in this field. Shanghai Petrochemical’s project with a total investment of 3.5 billion yuan-”12,000 tons/year 48K large tow carbon fiber” started construction on January 4, 2021.
Insiders said that the current operation of the domestic chemical industry has exceeded expectations. According to this development progress, the development of my country’s chemical industry will be able to reach a higher level, master more industry technologies, and gain more shares in the global chemical market.
The contradiction between supply and demand is not prominent, PVC futures price adjustment encounters obstacles
PVC futures fluctuated at a high level, but the operating range moved downward. The rise in futures boosted the confidence of market participants. The mainstream price of the domestic PVC spot market moved up, and low-priced sources of goods in the market were still hard to find. Although futures have pulled up and the PVC basis has recovered, the spot market is still at a premium. In the northwestern main production areas, the inventory pressure of enterprises is not great, some still have pre-sale orders, and the ex-factory quotations have been raised in a narrow range, and they can be adjusted flexibly according to their own conditions. Most of the production facilities are running smoothly, and the start-up level of the PVC industry is maintained at around 84%. There are few overhaul plans for enterprises in the later period, and the tight supply of PVC will be eased. The ex-factory prices of individual calcium carbide have risen, and the purchase prices have been generally stable. Due to the more serious impact of power rationing in Inner Mongolia, especially the Wumeng area, the supply of calcium carbide is difficult to recover in the short term. However, considering the downstream acceptance, the price adjustment of calcium carbide is rational, and the cost of PVC is high. The market point price advantage disappeared, and traders’ offers were firm, some of which were raised by about 30 yuan/ton. The downstream market is not very enthusiastic about chasing upswings, with a lack of active enquiries, and replenishing goods at bargain prices. The actual trading volume has improved compared with the previous period. The latest statistics show that the PVC export volume in May narrowed down to 216,200 tons, but the export arbitrage window in June was closed for most of the time, and PVC export volume is expected to decline at a high level. The number of arrivals in the market is relatively small, and the total social inventory of PVC in East China and South China has fallen to 145,000 tons. It is difficult to accumulate quickly in the short term, and low inventory provides strong support. With increasing supply and weakening demand, PVC fundamentals are expected to weaken. At present, the market contradiction is still not prominent. Under the condition of high spot premium, the main contract adjustment is slightly sluggish, showing a trend of high fluctuations. The above temporarily focuses on the resistance near 8800, and it is recommended to maintain a bearish thinking in operation.
1. Futures prices fluctuate
PVC futures hit 9435 in mid-May, setting a new high for the year and also hitting a new high in the past ten years. As prices continue to rise, upward pressure on PVC has increased, the momentum for the continued rise is weak, and the disk is rationally corrected. The center of gravity of PVC weakly loosened, falling below the 9000 mark, and basically fluctuating in the range of 8500-9000, repeatedly testing the 8500 mark support. In late June, the main contract fell for six consecutive trading days and successfully broke downward, reaching a minimum of 8295. The spot market has a deep premium. In the case of a high basis, after a short period of consolidation in the 8300-8500 range, PVC once again pulled up, broke the 20-day moving average, and recovered to near the 8700 mark.
2. the spot is relatively strong
The fall in futures affects the mentality of market participants. The domestic PVC spot market prices have followed loose, but there are still not many low-priced goods sources. There are not many circulated sources of goods in the market, which supports the high-level operation of PVC spot prices. The pressure on the upstream supply side is not strong for the time being, the quotations of companies in the northwestern main production area have not changed much, and the downstream market demand has just weakened, but the social inventory is at a low level, and the contradiction between supply and demand is not large. Quotation of type 5 calcium carbide materials: East China mainstream cash transfers are self-extracted 9000-9100 yuan/ton, South China mainstream cash exchanges are self-extracted 9070-9150 yuan/ton, Hebei cash transfers to 8910-8980 yuan/ton, Shandong cash transfers to 8900-8980 yuan/ Ton.
Post time: Jul-10-2021