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Yesterday began to enter the month of wax, marking the approaching of Spring Festival. Every December, the influence of Spring Festival factors on the market will be particularly important. The change of supply and demand fundamentals mainly depends on Spring Festival factors. Therefore, it is necessary for us to take the lunar calendar as the time axis to compare the performance of PVC spot, futures, basis, supply and demand in these years to predict the overall trend of December 2019.

First of all, let's review the specific situation of the December market in 2016-2018. From the perspective of the spot end, the overall change of December is not big, and the first and middle days of December in 2016-2017 have increased. In 2017, in addition to the stimulation of an unexpected shutdown of a device to the market, the other common reason is that there is a proper stock up in the downstream. However, due to the unwise stock up two consecutive years before the festival, the market performance in December 2018 is relatively flat Quiet. At the end of last ten days of December, most of the downstream holidays have been held, and the market atmosphere is getting more and more intense, basically in a state of price or no market. From the average price of previous years, the SG-5 in East China is between 6400-6600 yuan / ton at the end of last month.

Looking back from the futures end, with the terminal stock in the middle of the first half, the futures price also rebounded slightly, and the closing price of v05 contract was 6500-6700 yuan / ton in the last ten days.

In the past few years, the base difference trend of wax month shows that the base difference in the first and middle days of the month is basically in a gradual regression state, and the base difference is basically in a negative value from the middle and late days of the month.

Generally speaking, the upstream construction is generally at a high level every year, and social inventory starts to accumulate, but the price in December generally falls to the low level in the year, and the downstream will be properly stocked in the first and middle days of December, forming a certain support for the market, but the impact is relatively small. From the perspective of basis, futures contracts before the Spring Festival not only have feedback on the fundamentals of spot before the festival, but also have basic forecast after the festival. As the market is in a boom cycle in the previous years, the forecast for the future is generally cautious and optimistic, so futures generally rise in December. This year, things have changed subtly.

By comparing the data of the past four years, the main indicators from 2019 to the beginning of December are quite different from the average of the previous years. The spot price is much higher than the previous year's 500 yuan / ton, which is mainly caused by the excessive maintenance and long-term parking enterprises in 2019 and the obvious increase of maintenance losses. With the gradual going to the warehouse, there will be an obvious shortage of goods by the end of the year, and the spot price will rise significantly. In the month of wax, the long-term parking enterprises have not recovered since this year, and other enterprises have started to recover to a high level. At the end of the year, most of the new production capacity is still in trial production, the release volume is not large for the time being, and the out of stock state is slowly alleviating. The current spot price is difficult to attract the end customers to stock up, most of which are still based on rigid demand. As the demand just weakens in wax month, it is expected that the spot price will continue to fall 。

On the futures side, the futures v05 contract is not only restricted by the current supply and demand side, but also reflects the supply and demand expectations of the first half of next year. At present, the spot price is too high and the depth of futures is low, so the space for futures exploration is limited. In addition, the futures discount shows that the market is near strong and far weak. In 2020, the new capacity will be put into the market intensively, and the supply pressure is expected to be large. However, with the significant improvement of the completion data of the real estate, the demand in 2020 may also exceed the expectation. The comprehensive forecast indicates that the supply and demand in 2020 may slightly turn worse, but the balance of supply and demand will not be significantly broken. In the first half of 2020, the release of new capacity remains to be observed, and the demand increase is not pessimistic. Moreover, the social inventory before the Spring Festival is lower than that in the previous years, which to some extent reduces the accumulated storage pressure after the Spring Festival. Therefore, the supply and demand fundamentals in the first half of 2020 may not be much different from that in the same period of 2019. From the perspective of futures price comparison, futures are basically in moderate price compared with previous years. Therefore, no matter from the perspective of basis or the perspective of supply and demand expectations in the first half of next year, the fluctuation of futures prices in this year's wax month may not be large. There is still a downward trend after the Spring Festival, and the fluctuation range of the period price still depends on the accumulation range.

On the whole, the spot profit and price are at a high level at present. With the gradual easing of the spot shortage, it is still obvious that the spot price will continue to fall this year, but the futures price is in a reasonable range, and the futures price will fluctuate little in the month of wax.