[EVA Weekly Outlook] Domestic EVA Market Expected to Stabilize and Consolidate After the Holiday

I. Points of Interest

1 On October 8, according to Longzhong, the market remains concerned about the supply risks brought about by the unstable Russia-Ukraine situation, compounded by the continuation of U.S. sanctions against some oil-producing countries, leading to an increase in international oil prices. NYMEX crude oil futures for November rose by $0.82 to $62.55 per barrel, a week-on-week increase of 1.33%; ICE Brent crude futures for December rose by $0.80 to $66.25 per barrel, a week-on-week increase of 1.22%. China's INE crude oil futures were closed due to the National Day and Mid-Autumn Festival holidays.

2 After the holiday, some domestic styrene plants are gradually entering a state of reduced load or maintenance, leading to a decline in market demand. However, production enterprises have a relatively sufficient supply of ethylene resources available for external release. The bearish market supply and demand situation may result in a pessimistic outlook, and suppliers might consider offering discounts. It is expected that after the holiday, ethylene prices may slightly decline, with the transaction range in the East China region anticipated to be around 6,500-6,600 RMB/ton on the next working day. The supply of dollar-denominated sources is increasingly abundant, and a price drop cannot be ruled out, possibly weakening to between 800-820 USD/ton.

After the National Day holiday, vinyl acetate production enterprises mainly focus on fulfilling orders and shipments, resulting in a continually tight supply of marketable spot goods. The support for vinyl acetate from downstream EVA remains, and the operational enthusiasm of VAE emulsion factories may slightly increase compared to September. There is an expectation of increased negotiations for large orders downstream, leading to continued improvement in supply and demand. Market participants are highly motivated, and prices may continue to rise with some room for upward movement.

Core Logic: Cost-side support remains stable, with steady support from the EVA supply side. Downstream procurement demand revolves around just-in-time needs, leading to a supply-demand game in the market.

2. Price List Form

3. Market Outlook

During the holiday period, the domestic EVA market showed weak signals, with overall stability and tepid operations. Post-holiday, market supply is expected to remain ample, while downstream demand is likely to follow just-in-time purchasing, making significant improvement in market transactions unlikely. It is anticipated that after the holiday, the domestic EVA market will maintain stable adjustments, with attention on further market trends. Expected prices: soft material reference at 11,000-11,500 RMB/ton, hard material reference at 10,600-11,500 RMB/ton, and photovoltaic material at 10,900-11,200 RMB/ton.

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