Source: quick plastic perspective
PVC If you don't, you have made a great achievement
PVC is the most popular chemical product recently. Since the start of the rise last week, PVC has changed its previous downturn trend, continuously pulled up, broke through the previous resistance level, and hit the highest point in more than a year.
The main reasons for the sharp rise of PVC are as follows: the most important reason is that the policy of real estate and infrastructure construction started last week has been constantly favorable, and 80% of PVC downstream are related to real estate infrastructure, so the favorable policy is the most obvious stimulus to PVC, and PVC It is also in the historical bottom undervalued range, and the upper space is far larger than the lower space, so there is a great expectation of valuation repair. In addition, the recent fundamentals of PVC have also been somewhat favorable, with more maintenance and cost support strengthened after calcium carbide rebounded.
However, despite the rapid rise of PVC futures, the spot price keeps up, and the basis continues to weaken. At present, the spot price has been discounted by 500 yuan/ton. Because this rise was mainly affected by the policy and capital sentiment, the expected rise in the advance overdraft of futures was more obvious, and the spot side was weak due to weak demand and high inventory.
The performance of polyolefin is weak, and there is no condition for rapid growth
Although polyolefins also rose sharply last week, driven by macro sentiment, this week, with the exit of the bull market, polyolefins made a significant correction, which is far from the performance of PVC, and polyolefins do not have the conditions to rise sharply.
Supply side:
This year is a big year for polyolefin capacity expansion, of which PE capacity expansion is planned to exceed 5 million tons, PP The capacity expansion plan is even close to 10 million tons. As a contrast, PVC has little pressure for capacity expansion this year, only about 1 million tons, and has realized the negative impact of production. However, most of the new PP and PE units are put into production in the second half of the year. Considering such a large supply pressure, polyolefin has a strong air allocation attribute, and may become the worst performing chemical product.
Demand side:
Polyolefins have obvious characteristics of light and peak seasons, in which the peak season for PE is concentrated in the peak demand period for agricultural film around the Spring Festival, while the peak season for PP It is mainly concentrated in the peak consumption before and after the holidays, while the middle and late quarters of the second quarter are the traditional slack seasons for polyolefins. Downstream orders are insufficient, the operating rate is low, and the enthusiasm for stocking is not high. And from the comparison of price trends over the years, the low point of polyolefins in the year also appears in the middle and late quarters of the second quarter.
Inventory side:
Although polyolefins entered the centralized maintenance period in the second quarter, the supply pressure was greatly relieved, but the demand also entered the off-season, and the pressure of petrochemical destocking remained unchanged after the offset of the two. In addition, polyolefin will not only face the expansion of new units in the later period, but also the gradual decline of maintenance efforts. The benefits of maintenance will gradually weaken, and the difficulty of destocking will further increase. At present, the petrochemical inventory has reached a historical high point in the same period (150000 tons higher than that in the same period last year)
Summary:
The fundamentals of this PVC boom are general, and it is more emotional hype about the favorable policies and the repair of undervalued values. It is not referential, so although both are Plastic The three brothers, PP and PE lack hype points, and the fundamentals are empty, so they do not have the conditions for a big rise.
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