PVC main contract low volatility downstream demand is insufficient

News: China's imports of pure PVC powder in December 2019 were 58,000 tons, and the import volume in December decreased by 02,000 tons compared with November and 08,000 tons
from last year.
From January to December, the total import volume was 664,870 tons, down 72,930 tons
from 2018.
In December 2019, China's PVC pure powder exports were 25,500 tons, down 03,500 tons from November and 22,500 tons from last year, and the cumulative export from January to December was 506,700 tons, down 87,200 tons from 2018
.

On the first day after the holiday, the operating rate of PVC installations fell slightly by 2.
52% to 75.
11%.

PVC industry inventory (upstream + market inventory) was 475,600 tons, an increase of 51.
03% over the pre-holiday period and a slight increase of 1.
11%
over the same period last year.
Among them, the inventory of PVC upstream production enterprises was 265,600 tons, a significant increase of 112.
65% over the pre-holiday period and an increase of 122.
45%
over the same period last year.

Longzhong data statistics show that the output of domestic PVC manufacturers in January 2020 was 1.
80012 million tons, an increase of 4.
94% from the previous month and 5.
30%
from the same month last year.
In 2019, the domestic apparent consumption of PVC reached 19.
996 million tons, a year-on-year increase of 4.
32%, and the downstream consumption of PVC was 20.
0509 million tons, a year-on-year increase of 4.
73%.

Spot market: The PVC market in Qilu Chemical City remained calm, affected by the extension of the holiday, there is currently no quotation, and the market is still closed
.

Warehouse receipt inventory: exchange warehouse receipts reported 4755 lots, intraday -0 lots
.

Main position: The top 20 long positions in the main contract are 110103 lots, -22485 lots, short positions are 107233 lots, -27835 lots, and the net position is 2870 lots, which is a net increase
.

Summary: During the long holiday, PVC production enterprises basically maintained normal production, of which several sets of plants reduced production but also several new units were put into operation (however, the new equipment capacity is small, Qilu Petrochemical 130,000 tons, Anhui Huasu 160,000 tons, Ordos 200,000 tons).

The operating rate of PVC units fell slightly by 2.
52% to 75.
11%.

PVC industry inventory (upstream + market inventory) was 475,600 tons, an increase of 51.
03% over the pre-holiday period and a slight increase of 1.
11%
over the same period last year.
On the demand side, downstream factories mostly stopped in mid-January, and the current start has fallen to a low point, and many areas have issued notices, all new and under construction sites start and resume work need to be delayed
.
Therefore, most downstream enterprises have not yet set the start time, and the willingness to stock is weak
.
In general, the supply of PVC after the holiday continues to remain sufficient, and it is still in the off-season of PVC demand, downstream demand is insufficient, coupled with the need to delay the start of downstream construction, it is expected that the social inventory of PVC will rise significantly, which will suppress prices
.
It is recommended that investors hold short orders with caution
.