PVC: Crude Oil Fell Sharply during the Holiday, Non-agricultural Accidents Exploded, and Short, Medium and Long-term Trend Interpretation

PVC: Crude Oil Fell Sharply during the Holiday, Non-agricultural Accidents Exploded, and Short, Medium and Long-term Trend Interpretation

Foreword: It has entered into the fourth quarter, the overall third quarter market is expected to improve, and PVC has shown a good upward trend under the support of a number of policies and fundamentals. But the prices of the two markets have not exceeded the high points before the Spring Festival. What does the ensuing fourth quarter hold on to in the long term?

Pre-holiday review: At the early stage of the National Day, the high point of two cities began to fall sharply, the third quarter futures saw the highest point of 6632, and it witnessed rapid decline after a long period of increase. Spot prices fell endlessly, especially from late September to the end of the month, there were six consecutive sharp decline. But after the futures fell to below 6200, the spot market appeared relatively active point price transactions, and some merchants also appeared a certain speculative hoarding psychology.

Holiday crude oil: Record the largest weekly decline since March 2023, with Brent crude oil prices falling by about 11% and WTI crude oil prices falling by 8.80% during the holiday period, due to market concerns that sustained high interest rates will slow global economic growth and hit fuel demand, even though Saudi Arabia and Russia will continue to extend their voluntary production reduction plans until the end of this year. In addition, Russia has once again lifted some fuel export bans, exacerbating demand concerns caused by macroeconomic unfavorable factors.

Holiday Financial Market: The US stock market rose on Friday, with investors responding positively to the unexpectedly strong US non-farm employment report. The S&P 500 index rose 1.2%, the Dow Jones index rose 0.9%, and the Nasdaq Composite index rose 1.6%. The S&P 500 index rose slightly by 0.5% this week, ending four consecutive weeks of decline. The index has fallen 6% from its peak in July, and its increase has now shrunk to 12% since the beginning of the year.

Collection of two holiday events

1. The official manufacturing PMI of China in September was 50.2, with a previous value of 49.7, returning to the expansion range.

2. The 2023 National Land Change Survey was fully launched.

3. JPMorgan has raised its forecast for China's full year economic growth in 2023 from 4.8% to 5.0%. Citigroup has raised it from 4.7% to 5%.

4. The US Department of Labor released data on changes in non-farm employment and unemployment rates for September. Data shows that in September, the number of non-farm workers in the United States recorded an increase of 336000, a significant increase from the expected 170000, far higher than the 187000 in August. The unemployment rate remained flat from August's 3.8%, slightly higher than the expected 3.7%.

Future Market Forecast: From a short-term perspective, crude oil prices have significantly decreased during the 2 Festival period, and according to incomplete statistics, PVC production enterprises have accumulated a significant surplus of 310000 tons due to poor orders and deliveries during the holiday period. In addition, the price of calcium carbide has decreased by around 50-100 yuan/ton during this period. Therefore, facing the opening next week after the holiday, it is expected to show a trend of low opening. However, there are still expectations of repairment for the mid line in October. JPMorgan has raised its forecast for China's full year economic growth in 2023 from 4.8% to 5.0%. Citigroup has raised it from 4.7% to 5%. Therefore, there may be some expectations for the overall economic data of China in October, and policies may still follow up. Therefore, the mid line may repair the downward trend caused by bearish conditions before the holiday and during the holiday period. PVC will still face significant operational pressure in the fourth quarter in a long run .