PVC supply and demand may improve The improvement range is not optimistic

On the macro front, crude oil after the price war between Saudi Arabia and Russia in the early stage, the bottom of WTI crude oil of $20 / barrel was basically tested, and the new round of OPEC+ production reduction meeting also began negotiations on April 9, after four days of negotiations finally landed, according to OPEC+ official website production reduction statement, from May 1 to June 30, 2020 production reduction of 9.
7 million barrels / day, July 1 to December 31, 2020 production reduction of 7.
7 million barrels / day, Production cuts by 5.
8 million b/d
between January 2021 and April 30, 2020.
Many investment banking institutions are also pessimistic about the actual effect of the production reduction announcement, and most investment banking institutions said that the effect of reducing production by 9.
7 million barrels per day is better than nothing, and it is difficult to change the situation
of oversupply of international crude oil.
Therefore, from the perspective of crude oil, the market generally expects that the possibility of WTI falling below the previous low has been limited, but the oversupply situation is still serious, and it is still very difficult for crude oil prices to rise
.
In the case of unchanged expectations, crude oil lacks a new driving direction for the PVC market, and if crude oil rises or falls sharply in the future, the market will re-examine the future trend
.

From the perspective of the global epidemic, the epidemic in Europe and the United States has not yet reached an inflection point, and there is uncertainty
about whether the epidemic in Africa and India will fully break out.
The current market for the epidemic is expected to be the end of April and May Europe and the United States epidemic inflection point, if the epidemic in Europe and the United States in the summer is still difficult to be effectively controlled, the global economy will be greatly affected, the commodity market will be a second bottom, if the epidemic in Europe and the United States is effectively controlled, the global financial market will gradually improve the atmosphere, PVC will also form a support
.

From the perspective of PVC spot fundamentals, the current market's expectation for PVC fundamentals in the second quarter is generally that the output of supply-side countries first decreases and then increases, net imports continue to increase, demand continues to improve limited, social inventory destocking inflection point is postponed but there will be a wave of destocking in the second quarter, and the destocking range is not expected to be large
.
The specific analysis is as follows:

As the losses of upstream enterprises intensified, from the end of March, some companies began to choose to stop and reduce production, and the industry also showed signs
of centralized maintenance in advance.
Judging from the maintenance plan announced so far, the intensity is not much higher than in previous years, and it is difficult to continue to boost
the market within market expectations.

Overall, the supply and demand side of PVC in the second quarter may have an improvement expectation, but the improvement is still not optimistic, and the fundamental improvement expectation has been reflected by the market in early April, with the current supply-side production reduction is difficult to continue to promote the price to rise again, the demand side and imports still have certain hidden dangers expectations
.
There are still great uncertainties in macro crude oil and the international epidemic, and it is necessary to pay close attention to the development of events in the
later stage.