Crude Oil Ups And Downs, But PVC At The Mercy Of Futures?

In recent times, international crude oil due to the "Russia-Ukraine conflict" prices hit a record high. March 7, international crude oil futures prices rose sharply, Brent crude oil intraday high of $139, line to the highest level since 2008.

The US WTI crude oil futures main contract settled at US$119.4/barrel, up 3.2%; the Brent crude oil futures main contract settled at US$123.21/barrel, up 4.3%. on March 9, international crude oil prices plunged.

The main contract of US WTI crude oil futures settled at US$108.70/barrel, down 12.1%; the main contract of Brent crude oil futures settled at US$111.14/barrel, down 13.2%.

With the dramatic ups and downs in oil prices, commodity futures such as PVC moved higher again, with spot prices also experiencing greater volatility, driven by futures as well as energy and other aspects. Since entering 2022, the PVC market has experienced frequent ups and downs, with the overall situation remaining mainly in the range of RMB 8,000-9,400/tonne.

In early March, due to the conflict between Russia and Ukraine, crude oil prices soared, PVC and other commodity futures rushed higher, driven by futures as well as energy and other aspects, PVC prices rose continuously, up 8.83%. Subsequently, crude oil supply concerns eased and oil prices dipped slightly, PVC futures also surged higher and fell, with the spot PVC market following the decline.

In addition, the spread of the domestic epidemic, some regions and provinces and cities closed city isolation, downstream demand is expected to decline, PVC prices overall weak adjustment.

At present, the field is long and short, uncertainties are more, PVC market direction is still unclear. The following analysis from several sides one by one!

Upstream, the northwest region calcium carbide producers device start stable, calcium carbide supply is normal. The company's business is still in the midst of a series of problems. In the short term, the price of calcium carbide is still at a high level, and the cost side support still exists.

In the short term, the price of calcium carbide remains at a high level and cost support remains. As of March 18, the start-up load of PVC producers rose back to 82.39%. Later on, with the recovery of installations, the start-up rate is still expected to rise, but attention needs to be paid to the overhaul of PVC enterprises.

Futures, the recent crude oil surge and plunge, market sentiment is slightly confused. The main PVC futures contract settled at RMB 9,135 on the 7th and RMB 8,966 on the 21st. The current market is still at risk due to the impact of crude oil volatility, and short-term PVC futures will still follow the cost trend.

Demand, since March, the release of downstream demand has weakened. There are not many new orders from the overall downstream product factories. In addition, although the downstream start-ups have improved, the overall start-up rate is lower than the same period in previous years.

With the repeated domestic epidemic, some areas and provinces and cities closed or isolated, downstream products enterprises will again be suppressed, followed by the suspension of construction sites and other aspects of the start, the demand side will also be subject to certain impact.

In summary, the supply stabilization, demand is weak, the cost still exists support, more than short game, PVC market will maintain the oscillating trend, the atmosphere of wait and see.