videopokerhighlimit| Can the three brothers of plastics, PVC, lead the way?

Source: Quick Plastic Viewpoints

If PVC doesn't sound, it's already amazing

To talk about the hottest chemicals recentlyvideopokerhighlimitIt is none other than PVC. Since it started rising last week, PVC has changed from its previous downturn and continued to rise, breaking through the previous resistance level in one fell swoop and hitting its highest point in more than a year.

There are mainly the following reasons for this surge in PVC: The main reason is that real estate and infrastructure policies have been favorable since last week, and 80% of the downstream PVC are related to real estate infrastructure. Therefore, favorable policies have the most obvious stimulus to PVC, and PVC itself is also in the low valuation range at the bottom of history. The space above is much larger than the space below, and there are great expectations for valuation repair. In addition, PVC has also had certain positive fundamentals in the near future, with increased overhauls and increased cost support after calcium carbide rebounded.

However, although PVC futures are rising rapidly, the spot has followed suit, and the basis has continued to weaken. Currently, the spot has been discounted by 500 yuan/ton. Because this increase is mainly affected by policies and capital sentiment, futures overdraft are expected to increase more significantly, and the spot side is affected by weak demand and high inventories, so it is weak to keep up with the increase.

Weak performance of polyolefins lacks conditions for a surge

Although polyolefins also resonated and rose sharply last week driven by macro sentiments, this week, as the bulls took profits and left the market, polyolefins corrected significantly, which was far from the performance of PVC. Polyolefins were temporarily not qualified for a surge.

Supply side:

This year is a big year for the expansion of polyolefins, with PE capacity expansion plans exceeding 5 million tons, and PP capacity expansion plans even close to 10 million tons. In contrast, PVC capacity expansion pressure this year is not large, only about 1 million tons and has already been realized. Bad, and most of PP and PE new units are put into production in the second half of the year. Considering such a large supply pressure, polyolefins have strong air-distribution properties and may become the worst performing chemical.

Demand side:

Polyolefins have obvious characteristics of off-season and peak seasons. Among them, the peak season for PE is concentrated during the peak demand for agricultural mulch films around the Spring Festival, while PP is mainly concentrated during the peak consumption around the holidays. The middle and late second quarter is the traditional off-season for polyolefins, with insufficient downstream orders., the operating rate is low, and the enthusiasm for stocking is not high. Moreover, through the comparison of price trends over the years, the lows of polyolefins during the year also appear in the middle and late second quarter.

Inventory side:

Although polyolefins have entered a centralized maintenance period since the second quarter, and supply pressure has been greatly relieved, demand has also entered the off-season. After the two are offset, the pressure on petrochemical dewarehousing will not decrease. In addition, in the later period, polyolefins not only faced the expansion of new units, but also the maintenance efforts were gradually declining. The maintenance benefits were gradually weakening and the difficulty of removing the warehouse further increased. At present, petrochemical inventories have reached a historical high in the same period (higher than 150,000 tons in the same period last year)

Summary:

The fundamentals of the surge in PVC are average, and it is more about emotional hype about favorable policies and low valuations. It is not for reference. Therefore, although they are the three brothers of plastics, PP and PE lack hype points, and their fundamentals are empty and do not have the conditions for a surge.