PVC volatility is lower and the market transaction situation is not good

News: U.
S.
PVC production was 1.
32 billion pounds in June, up from 1.
2 billion pounds in June and up 8%
from 1.
22 billion pounds in May.
Total sales in June were 1.
42 billion pounds, up 11.
6% from 1.
27 billion pounds in May, and 948 million pounds were sold primarily in the U.
S.
, up 20.
8% from 784 million pounds in May and up 11.
6%
from June.

A fire broke out at Formosa Plastics' Mailiao refinery, and it is unclear whether downstream production was affected
.
The oil extraction desulphurization unit No.
2 (RDS) in the event of the accident can handle 80,000 barrels
per day.
The plant has a maximum capacity of 540,000 barrels per day and an annual production capacity of 1.
03 million tons of ethylene, 515,000 tons of propylene and 162,000 tons of butadiene
.

Spot market: Qilu Chemical City PVC market weak operation, traders offer lower, calcium carbide 5 type material price is about 6600 yuan / ton, ethylene price S1000 price is 6880 yuan / ton, S700 price is 6980 yuan / ton, the transaction situation is not good
.

Warehouse receipt inventory: exchange warehouse receipts reported 429 lots, intraday -0 lots
.
Main positions: The top 20 long positions in the main contract are 113014 lots, -5308 lots, short positions are 127971 lots, -467 lots, net positions are -14957 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 increase
.
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
.
And after a sustained rise, there are signs of overbought in the short term, and a technical correction needs to be
prevented.
Operationally, it is advisable
for investors to wait and see for the time being.