PVC monthly report in February 2023: the probability of price decline is large

1. January initially saw a period of rain before this spell of sunshine, typically marking the transition from continuous overcast skies. This change not only brings about a boost in mood but also signifies the need for timely adjustments in lifestyle. Wherever the news may not be favorable, like on January 5th when people's moods might dip and negative emotions could accumulate, deciding to initiate comprehensive psychological counseling and support measures can be beneficial. New initiatives such as offering preferential purchase prices for apartments and houses that are 3 months or less below market value can stimulate property transactions, potentially reducing inventory levels, lowering prices, or maintaining continuity for 3 months.

On January 17th, the National Sports Bureau's processing hall displayed on the exhibition stand in the Shougang Park, showcasing China's national maritime support, where the significant demand for ice skates has contributed to the development of local industries, supporting the "ice and snow economy." In terms of policy, the mid-January period saw a fundamental shift in China's domestic and foreign policies, with internal economic pressures easing, and these policies complementing the uplift in mood brought about by the sunny weather. After the rain, PVC warehouses exhibit moisture absorption characteristics, but storing them continuously for 3 months can lead to significant water accumulation, posing challenges for the timely adjustment of PVC prices.

The rise in the period from the beginning of January to the Spring Festival is still the continuation of the previous trading logic, and is still dominated by optimistic expectations of demand. The positive information of real estate continues. For example, the People's Bank of China and the China Banking and Insurance Regulatory Commission issued a notice on January 5, deciding to establish a dynamic adjustment mechanism for the interest rate policy of the first set of housing loans. For cities where the sales price of new commercial residential buildings has declined for three consecutive months on a month-on-month basis and year-on-year basis, the lower limit of the local interest rate policy of the first set of housing loans can be maintained, lowered or cancelled in a phased manner. On January 17, Liu He, Vice Premier of the State Council, said at the World Economic Forum in Davos that the real estate industry is the pillar industry of China's national economy, and the huge demand potential will provide strong support for the development of the real estate industry. He also disclosed at the World Economic Forum that the current "guaranteed building" involves more than 2600 unpaid projects of 1.88 million residents in the country. Macroscopically, the impact of the epidemic in China basically ended in mid-January, and the recovery of domestic consumption is expected to strengthen. These optimistic expectations jointly promote the rise of PVC. After the Spring Festival, PVC inventory was neutral, but the absolute level of inventory was under great pressure. The expected transaction for three consecutive months ended temporarily, and PVC fell significantly.

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