The hottest PVC futures may usher in a round of ri

2022-10-20
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PVC futures may usher in a round of rising market after a short-term stalemate

I. market review

the trend chart of PVC futures price of Dachang exchange

the chart is the trend chart of PVC futures price of Dachang exchange. (picture source: Wenhua finance and economics, CSC futures)

the surge in PVC futures prices at the beginning of the year was blocked, and then the yield on the issuance of central bills plunged sharply due to the unexpected increase of the people's Bank of China for three months. After that, the crude oil fell sharply, the spot market remained weak, and the demand continued to be weak. In addition, the delivery of contracts in January caused some low-cost sources to impact the spot market, and PVC futures fell. However, supported by costs, the futures price fell back to around 7250 and hit the bottom and rebounded. On the first trading day after the Spring Festival holiday, PVC futures jumped sharply and opened higher, but then affected by factors such as the departure of profit taking, the transformation of spot major scientific and technological achievements in Beijing and the industrialization project of green printed circuit preparation technology based on nano materials successfully passed the acceptance of the expert group, and the continuous weak market trading, the futures price fell again and fell back to the "7" range for shock consolidation. Boosted by good economic data, and the impact of futures warehouse receipt cancellation on the market was less than expected, the futures price rose again in late March, and then prepared to consolidate in the volatile range

II. Market analysis

1. International crude oil at the beginning of the year, boosted by cold weather, geopolitical factors and optimistic economic data, and investors returning to the market after the New Year holiday, international crude oil continued to rise, rising above $83/barrel. However, since then, the inventory data released by the EIA shows that the U.S. crude oil inventory is still abundant, and the demand for heating oil continues to be weak. In addition, the demand for heating oil will gradually fall as the temperature rises, the U.S. macroeconomic data is poor and the dollar is stronger, and the oil price begins to fall from a high level. Subsequently, as the Central Bank of China raised the reserve ratio and controlled the extent of credit expansion, US President Barack Obama issued a proposal to limit bank risk-taking, the financial market was full of bad news, and the demand for crude oil was still weak, and the oil price fell continuously. Affected by favorable economic data and geopolitical factors in early February, international crude oil rose strongly, rising nearly 6% in two days. However, the market fundamentals remained weak, investors took profits, and the debt problems of euro zone countries triggered market concerns. The international crude oil market was large. At present, China's imports of raw materials such as yuan coal mainly from Mongolia fell sharply, falling below the $70 integer mark at one time, down nearly 8%. In order to avoid poisoning and loss of data, after that, affected by factors such as the storm hit the eastern part of the United States, the strike of French refineries, the weakness of the dollar and the rise of U.S. stocks, as well as investors' fear that Iran's nuclear program may cause tension, the international crude oil fluctuated upward and broke through the integer level of $80. However, the intertwining of economic data makes the trend of crude oil lack directional guidance. The continuous increase of crude oil inventory and the continuous decrease of refined oil inventory also make the market confused about whether the demand for crude oil really recovers, and the oil price fluctuates and consolidates at a high level. Although the oil price rose sharply at the end of March and early April, the crude oil inventory is still high, the demand has not fully recovered, and the trend of crude oil in the later stage may continue to be high and volatile

wti crude oil trend chart

the chart is WTI crude oil trend chart. (image source: Boyi master, CSC futures)

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