PVC narrow finishing Downstream demand recovery is better

News: In the month of June 2020, domestic PVC production was 1.
631 million tons, up 2% compared with the same period last year; From January to June 2020, the cumulative output of domestic PVC was 9.
688 million tons, down 3.
2%
compared with the same period last year.

In June 2020, domestic calcium carbide production was 2.
226 million tons, up 5.
8% compared with the same period last year, and from January to June 2020, the cumulative output of domestic calcium carbide was 13.
102 million tons, down 2.
3%
compared with the same period last year.

Last week, PVC social inventory increased by 2.
76% month-on-month, down 11.
82% year-on-year, in East China, it increased by 0.
98% month-on-month and decreased by 11.
16% year-on-year, and South China increased by 10.
20% month-on-month and decreased by 14.
29%
year-on-year.
East China stocks are 207,000 tons, South China 54,000 tons
.

Spot market: Qilu Chemical City PVC market narrow adjustment, traders offer slightly lower, calcium carbide method 5 type material price is about 6550 yuan / ton, ethylene price S1000 price is 6880 yuan / ton, S700 price is 6980 yuan / ton, the transaction situation is general
.

Warehouse receipt inventory: exchange warehouse receipts reported 388 lots, intraday -0 lots
.
Main position: The top 20 long positions in the main contract are 115446 lots, -3833 lots, short positions are 130453 lots, +0 lots, net positions are -15007 lots, net short increases
.

Summary: Asian demand is basically stable, and Formosa Plastics raised its quotation in August to support
PVC.
Domestically, the maintenance of domestic production enterprises continued
.
Market supply is expected to decrease
.
In terms of demand, in May, the apparent demand for PVC increased year-on-year and was higher than the same period last year, indicating that downstream rigid demand is still there
.
Social inventories have shown signs of accelerating their decline, and have now returned to below the level of the same period last year, indicating that PVC downstream demand has recovered well, supporting the price of PVC
.
However, demand in areas affected by flooding in the near future will weaken
.
Operationally, it is advisable
for investors to wait and see for the time being.