abstract
From 2020 to 2022, with the outbreak of the epidemic as the starting point, the direct or indirect impact on large categories of assets will run through all the time. It coincides with the changes in the world, the times and the history. The deep-seated contradictions in global development are becoming more prominent and complex. The changes and remolding of the global economy and financial conditions are increasingly intensified, and commodities have also ushered in a round of magnificent historical market.
one
Market review in 2020
In 2020, PVC followed a wave of "V" trend of commodities. The impact of the epidemic, the supply shock and the loose conditions brought by the release of water from the global central bank have become the main logic of commodity trading in 2020.
Phase I (2020.01-2020.03) - see the opportunity in danger
In 2020, the sudden health events caused by the COVID-19 during the Spring Festival led to the closure and control of all parts of China. The first day after the Spring Festival, PVC fell precipitously along with the bulk commodities, and then fluctuated sideways for a month. In March, the COVID-19 broke out in Europe, the United States, the Middle East, Asia and many other major economies in the world. Global panic spread, and a broad range of assets fell. With the impact of imports from Shanghai, PVC plunged into a round of deep decline along with bulk commodities. The lowest price also fell below 5000 yuan/ton, reaching a very low position in history, but it also has the property of oversold investment.
Phase II (2020.04-2020.10) - Dawn display
From the beginning of the second quarter, thanks to the effective control of the domestic epidemic and the continuous water release policy of the central banks at home and abroad, commodities began to stop falling and rebound in April, and PVC also followed the gradual recovery, starting a bull market cycle, rebounding to more than 6000 yuan/ton from the historical low of 4950 yuan/ton. Since June, on the one hand, the frequent occurrence of extreme weather such as floods and high temperatures in the south has led to the suppression of the demand side of PVC, on the other hand, the continuous arrival of overseas low-cost goods in Hong Kong has brought a supply shock, which also led to a certain rise in PVC in the third quarter, which is dominated by sideways shocks.
The third stage (2020.11-2020.12) - conflict breeding
After November, as the West Lake Chemical, Formosa Plastics and other devices in the United States were shut down by hurricanes, the superimposed international demand gradually recovered due to the impact of the release of water from overseas central banks, the external quotation began to rise sharply, both the internal and external prices were repaired, the domestic import window was closed, and the export window was opened. Stimulated by this situation, the domestic PVC inventory was further reduced, and the pattern of oversupply gradually emerged, with the East China spot once topping 9000 yuan/ton. However, the contradiction that the high price is difficult to effectively transmit to the domestic downstream is also gradually gestated at this stage. The downstream of PVC gradually appears the phenomenon of substantial loss and shutdown. The negative feedback to the front-end fermentation, the inflection point of the industrial chain inventory, superimposed with the impact of the seasonality of the winter off-season and the low willingness of the bulls to deliver (the delivery date of the 01 contract is close to the Spring Festival), the PVC price began a sharp correction in December, falling by more than 1000 yuan/ton.
two
Market review in 2021
In 2021, PVC walked out of a magnificent "M" trend, and in October 2021, the price of futures contracts reached a new high since the listing, reaching 13380 yuan/ton. In 2021, the recovery of overseas economy and the dual control system of domestic energy consumption brought a resonant rise in bulk commodities, which also benefited from the super bull market of PVC throughout the year. In addition, the trend of PVC at all stages was also affected by other factors.
Phase I (2021.01-2021.04) - supply shock
In January-April, due to the impact of the cold wave in North America, the operating rate of PVC in the United States, the world's largest exporter, fell to 70%, close to the operating rate in the worst period of the epidemic in 2020, which also led to further imbalances in the global PVC supply and demand structure, high overseas prices, and the re-opening of the arbitrage window in the internal and external markets; Secondly, since March, driven by the "double control" policy in Inner Mongolia, the impact of electricity restriction has intensified, and the upstream carbide enterprises have seen a significant decline in the start of construction, and the output has dropped significantly, so the carbide price has also increased significantly. The disturbance of the raw material end has pushed up the production cost of PVC, bringing strong cost support. The overseas supply and demand gap and the disturbance of domestic raw material end jointly promote the price of PVC all the way up at this stage.
The second stage (2021.05-2021.06) - high-level strike
In May, the State Council continued to pay attention to the problem of commodity price rise, and deployed to do a good job of ensuring the supply and price stability of commodities. In addition to the recovery of foreign supply, the market also returned to rationality, and PVC and other domestic chemicals experienced a phased correction. However, the contradiction between domestic supply-side shocks and overseas overheated demand has not been resolved, and the cost of raw materials is also high. At this stage, PVC is only under the pressure of speculation. From the perspective of valuation and driving, the fundamentals are still beneficial to the bulls, and the larger contradiction between supply and demand is also gradually accumulating.
Phase III (on 2021.07-2021.10) - Dual control upgrade
In July and September, due to the upgrading of the domestic energy consumption double control policy, the disturbance of raw materials at the carbide end was intensified, and the start of construction was unstable, resulting in the high cost of PVC production. In addition to the impact of the maintenance and load reduction of PVC enterprises, their own supply and demand were further tightened, and the dominant inventory continued to decline. The price of PVC in the traditional off-season rose against the trend. The high macro sentiment and its good fundamentals have also brought a round of historical bull market for PVC. The spot market is hard to find a commodity, and the futures market has also continued to pull up, especially after the National Day, it has reached a record high of 13380 yuan/ton, and the basis has also remained at a historical high of more than 1000 yuan/ton during this period.
Stage IV (2021.10-2021.12) - foam dissipation
10.1 After the National Day, the huge fluctuation of bulk commodities has aroused strong attention from the domestic high-level. Led by the high-level and jointly with many ministries and commissions, the market participants of "malicious speculation" have been severely punished. The National Development and Reform Commission has continuously issued documents to curb the "coal excess craze" and fully promoted the release of coal production capacity. Bulk commodities led by steam coal have also experienced a deep correction, and PVC is also unavoidable, with a huge decline of more than 4000 yuan/ton. Panic among market participants spread, and the phenomenon of selling was obvious. Hidden inventory gradually became apparent, and the high price foam of PVC was gradually squeezed out; At the same time, the overheated overseas economy has also begun to cool down, exacerbating the callback momentum of commodities.
three
Market review in 2022
In 2022, PVC showed an "L" trend. The contraction of demand and weakening of expectations have gradually replaced the impact of supply shocks, which has become the main logic of commodity trading this year. The downturn of domestic real estate and the tightening of monetary conditions of overseas central banks accelerated the downward trend of PVC from both the internal and external demand side.
Phase I (2022.01-2022.03) - export driven
The PVC market in the first quarter of 2022 was mainly driven by the increase in exports and the expectation of stable growth (put forward at the Central Economic Work Conference in December 2021). Although domestic demand has not performed well under the pressure of real estate and epidemic, the unexpected performance of external demand has made up for the weakness of domestic demand, which makes the overall demand for PVC more resilient, and the dominant inventory can be eliminated. The combination of high overseas energy prices makes the overall chemical products easy to rise but difficult to fall. In particular, after February, various positive factors (the arrival of the peak overseas demand season, the expiration of India's anti-dumping policy against China's PVC, and the Russian-Uzbekistan conflict led to a surge in energy prices, etc.), which led to strong shocks in the prices of domestic chemicals and PVC.
The second stage (2022.04-2022.10) - domestic and foreign troubles
At the beginning of the second quarter, the impact of the global supply shock weakened. Influenced by the domestic epidemic, the Federal Reserve's interest rate increase and the real estate control, the demand contraction and the weakening of expectations gradually became the main logic of market transactions. The macro economy also resonated downward, and the bulk commodities all fell to varying degrees, especially the property related assets. The decline lasted until October, and the prices of some varieties hit a new low in nearly two years. The price of PVC has also been falling under the influence of "domestic worries and foreign aggression", where domestic demand is less than expected and external demand continues to decline. Although there is occasional rebound in the middle, the trend is still the following: the price has dropped from 9500 yuan/ton at the beginning of April to below 5500 yuan/ton. The two small rebounds in the middle occurred respectively from the end of May to the beginning of June (expected resumption of production), and from the end of July to the middle of September (the super decline attribute of PVC trading superimposed the expectation of the "golden 9 silver 10" peak season). However, under the influence of multiple factors such as the decline of domestic real estate, the repeated COVID-19 epidemic, and the Federal Reserve's interest rate hike, PVC has continued to follow the accelerated decline of commodities and other major categories of assets since then.
The third stage (2022.11-2022.12) - the dark has passed
In November, with the relaxation of the margin of the domestic COVID-19 prevention and control policy, the release of the "three arrows" policy of real estate, and the slowdown of the Federal Reserve's expectation of interest rate increase, market confidence reignited, feeling that the end of the dark has passed, the end of the policy is now, and the future end of the market will appear sooner or later. Some macro funds and industrial funds began to bet on commodities and China's economic recovery, and the stock market and commodities have performed well. During this period, the PVC futures contract also started to rebound at the low point, but was still weak in the range of 6000 - 6500 yuan/ton due to its weak fundamentals and the expectation of the accumulation of stocks during the Spring Festival. At the same time, since the beginning of the fourth quarter, with the production of new units such as Julong Chemical, Shandong Xinfa and Guangxi Huayi, the supply pressure of PVC has become more and more obvious. In addition to the large amount of dominant inventory, the weak basic reality still suppresses the space above PVC. It is still difficult for PVC to break through and stabilize the 7000 yuan/ton mark in the medium and short term.
