Futures experience a sharp drop; PVC market remains stable with a wait-and-see attitude

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Futures Plunge; PVC Market Remains Cautious March 8, 2017 This morning, prices in the domestic PVC market remained stable, while the futures market saw a sharp drop. The optimism regarding price increases in the spot market was hit hard by this development. End-users continued to adopt a cautious approach, purchasing only as much as they needed. Today, the mainstream price of Type 5 ordinary calcium carbide in East China remains at 6,400–6,500 yuan per ton ； The prevailing transaction price for SG-5 produced by the calcium carbide method in the South China market is 6,430–6,450 yuan per ton (pick-up available). The actual transaction index for PVC in the domestic plastic market was 848 points, remaining stable compared to the previous trading day. (Click to view market prices in more regions) The PVC market price in East China remains stable, with a subdued trading atmosphere. Today, the mainstream price for grade 5 ordinary calcium carbide remains at 6,400–6,500 yuan per ton, with actual transaction prices determined on a flexible basis. 　　 　　PVC market prices in South China remain stable, with moderate trading activity as investors adopt a wait-and-see approach. The mainstream transaction price for ordinary Type 5 calcium carbide available for pick-up is 6,430–6,450 yuan per ton. 　　 　　PVC prices in the North China market remain stable; market inquiries are moderate, with actual transactions subject to negotiation. Type 5 material costs 5,950–6,000 yuan per ton excluding taxes, and the price is slightly lower when delivered as a complete shipment. 　　 　　2.1 Upstream Market Analysis: Morning Report on the Upstream Sector – Closing prices of crude oil and monomers as of March 7 　　　Crude oil price: WTI crude oil futures closed down by $0.06, a decrease of 0.11%, at $53.14 per barrel. Brent crude oil futures fell by $0.09, or 0.16%, to $55.92 per barrel. The optimistic remarks by the Saudi oil minister fail to dispel investors’ concerns over increased U.S. production. 　　 　　Calcium carbide: Today, the price of calcium carbide remains stagnant, with a general attitude of wait-and-see. For PVC manufacturers, the arrival of calcium carbide is uneven, while those in the calcium carbide industry have smooth shipments and generally no inventory pressure. The balance between supply and demand in the market continues to be in flux, so there are no significant changes expected in price levels for the time being. The prices of calcium carbide at consumers’ doors in various regions are as follows: the prevailing purchase price for high-quality products in Shandong is 2,820–2,950 yuan per ton ； In the Tianjin area, Dagu Hua at 295 L/KG costs 2,830 yuan per ton ； The receiving price for Sanyou in Tangshan, Hebei is 2860 yuan per ton at 300 L/KG, while that for Shenghua in Hebei is 2720 yuan per ton at 290 L/KG ； Henan Yuhang’s 290 L/KG product is available at 2,880 yuan per ton ； Lianchuang’s Inner Mongolia supply costs 2,810 yuan per ton ； Pickup in Yushui, Shanxi: 290 L/KG, price of 2,480 yuan per ton ； The price for goods sourced from Inner Mongolia and Ningxia, delivered to Shaanxi Beiyuan, is 2450 yuan per ton; the price for locally sourced goods in Shaanxi is 2410–2450 yuan per ton. 　　 　　2.2 Ex-factory prices (click to view more ex-factory prices) 　Most PVC manufacturers maintain stable prices; a few have made slight increases, while sales remain average. The price of type 5 ordinary calcium carbide in the area around Inner Mongolia is around 6,200–6,300 yuan per ton, with actual transaction prices being lower. The mainstream acceptance price in Shandong region is 6,450–6,550 yuan per ton at the factory exit. 　　 　　2.3 Futures Market 　　　Today, the PVC1705 contract saw a significant drop in price. It opened at 6,590 yuan per ton, reached a high of 6,615 yuan per ton, dropped to a low of 6,400 yuan per ton, and closed at 6,495 yuan per ton – a decrease of 260 yuan per ton. The trading volume was 193,656 lots, while the open interest decreased by 3,954 lots to 112,770 lots. For plastics, it is expected that the 1705 contract will remain in a range-bound trading pattern in the short term. 　　 　　3. Market Forecast 　　　Futures prices have dropped sharply, affecting spot transactions; sales volumes have declined in various regions ； Production enterprise prices remain firm, with only slight easing in market quotes in some cases. Therefore, for plastics, the PVC market is expected to continue to require close attention to inventory levels, operational status of end-users, and futures trends in the next trading day; it is anticipated that the market as a whole will remain stable. (Excerpt from FindPlastic.com)