[EVA Morning Brief] Domestic EVA Market Expected to Stabilize and Consolidate

1. Focus Points

1 On September 23, [Longzhong] the instability of the Russia-Ukraine situation still exists, and the U.S. sanctions on certain oil-producing countries may escalate, leading to an increase in international oil prices. NYMEX crude oil futures for the November contract rose by $1.13 to $63.41 per barrel, a week-on-week increase of +1.81%; ICE Brent crude futures for the November contract rose by $1.06 to $67.63 per barrel, a week-on-week increase of +1.59%. China's INE crude oil futures for the 2511 contract fell by 8.9 to 475.3 yuan per barrel, but rose by 7.0 to 482.3 yuan per barrel in the night session.

2 Ethylene: The pressure from suppliers to ship increases, coupled with the restart of large ethylene facilities in the Jiangsu region, which may drive an increase in local supply. The market's willingness to sell at lower prices is rising, and there is a possibility that prices may continue to decline in the future. The expected transaction range for the next working day in the East China region is around 6700-6800 yuan/ton; USD negotiations may remain between 830-860 USD/ton.

Vinyl acetate: The vinyl acetate market is experiencing narrow fluctuations. Downstream large orders are increasing, and production enterprises are smoothly fulfilling orders. The available spot supply in the market is limited, keeping price levels firm, with some quotations on the higher side. With the National Day holiday approaching, some downstream users still have expectations for stockpiling, supporting the sentiment of industry players. There is an expectation for increased short-term local spot supply. Attention should be paid to the shipping pace of production enterprises and the flow of goods. It is anticipated that the vinyl acetate market will maintain a high-level consolidation in the coming days.

Core logic: The cost of ethylene is stable and consolidating, while the trend of vinyl acetate is also consolidating. The cost support remains acceptable, with a strong supply side for EVA providing support. However, the purchasing pace from downstream has slowed down, and the market is operating steadily with consolidation. Ahead of the holiday, traders are primarily focused on selling.

II. Price List

III. Market Outlook

In the short term, the domestic EVA market is supported by a strong supply side, with some soft material supply possibly being supplemented. The spot demand for photovoltaics is decent, and EVA manufacturers are maintaining stable prices to support the market. Before the holiday, some holders are opting for a more secure approach by settling transactions, resulting in a sluggish transaction price in the foaming market. However, with stable support from the supply side, the domestic EVA market is expected to remain stable and show a consolidation trend. Forecast: soft material is expected to be 11,200-11,600 RMB/ton, hard material 10,700-11,500 RMB/ton, and photovoltaic material 11,000-11,200 RMB/ton.