In April, the domestic EVA market continued to decline, with spot prices generally dropping significantly. According to the Commodity Market Analysis System of Shengyishe, as of April 30th, the benchmark price of EVA in China was 11333.33 yuan/ton, a decrease of 5.03% compared to April 1st.
Fundamental analysis
In terms of raw materials:
In terms of raw material ethylene, the domestic spot supply situation was tight in early April, coupled with the maintenance of ethylene plants in neighboring countries, supporting the strong operation of ethylene prices. Mid month market consolidation volume lacks further guidance. With the recovery of supply, the number of offers in the latter half of the year began to increase. At the same time, domestic demand has remained stable with a slight decline, and supply pressure is gradually increasing. It is expected that the ethylene market may be weak after the holiday;
The market for vinyl acetate also fluctuated and consolidated during the month. Both supply and demand have decreased in the early stage, leading to a stalemate in the game. There were new production capacity investments in China within the month, but in the short term, self consumption and digestion did not create additional pressure on supply. However, the downstream load is gradually decreasing, and the consumption of vinyl acetate has decreased to some extent. The spot price of vinyl acetate in the market is fluctuating. Based on the performance of the upstream secondary material market in April, the cost support for EVA has generally remained flat.
In terms of supply:
In early April, the load level of domestic EVA enterprises continued to reach a high level of nearly 90% of the average construction at the end of March, leading to high supply pressure in the industry and a loss of focus on factory pricing. With the successive maintenance of Ningbo Formosa Plastics, Zhongke Refining and Chemical, and Zhejiang Petrochemical, the operating rate at the end of the month has significantly dropped to around 70%, and production has also decreased simultaneously. Although the current on-site supply of goods remains abundant, the supply pressure has eased compared to the beginning of the month. However, overall, the supply side still lacks support for EVA.
In terms of demand:
The demand side performance of EVA remained weak in April. The new quarter orders for foamed shoe materials have already exhausted their market driving effect at the beginning of the month, and traditional downstream purchases such as cable materials are weak. The purchasing level of photovoltaic enterprises is lower than expected, and on-site trading is concentrated in low-end offers. The buyer camp has poor confidence and is mainly cautious in pre holiday stocking, with no significant increase in volume observed. There are very few new orders in the market, which has led to an increase in actual orders, discounts, and sales by merchants. During April, there was a significant drag on the EVA price trend from the demand side.
Technical analysis
The probability of an increase in EVA’s future market is lower than that of a decrease, and spot prices may be weak and difficult to improve. The prediction model of the Business Society’s commodity analysis system shows that since March 24, 2024, the 7-day moving average has crossed the 30 day moving average and started a downward trend. Currently, both moving averages continue to decline in the same direction. On April 21, 2024, it is estimated that the probability of a change in operating trend (i.e. crossing the 7-day moving average above the 30 day moving average) occurring within the next 7 days is 37.28%.
Historical price monitoring [mid low level]: Since the beginning of 2024, EVA prices have risen first and then fallen. The current monitoring positions are 1-year low, 2-year low, and 3-year medium low. According to the Commodity Analysis System of Business Society, the average EVA price in the past three years is 17299.91 yuan/ton, with a median value of 19433.33 yuan/ton, a minimum value of 11333.33 yuan/ton, and a maximum value of 27533.33 yuan/ton. The low price difference (compared to the lowest price difference in the past three years) is 0 yuan/ton, and the top price difference (compared to the highest price difference in the past three years) is -16200 yuan/ton.
In April, the 30 day off average price of EVA dropped from -65.56 yuan to -331.11 yuan, indicating a sustained decline in EVA prices.
Future Market Forecast
The current domestic EVA market price has been continuously declining for more than a month, but there is still no clear turning point. Firstly, from a fundamental perspective, the secondary raw material market is expected to remain stable with little movement, and future changes may still be limited, providing support for the spot market to become smoother. There is little possibility of a rebound in demand after the end of the period, and the market may still be struggling to maintain the demand line. Technically speaking, the probability of crossing the 30 day line above the 7-day line in the short term is relatively low, while the commodity market analysis system of Shengyishe indicates a higher probability of continuing the weak trend of EVA in the future. In summary, it is expected that the EVA market will be mainly weak and consolidating after the holiday. It is recommended to closely monitor the supply side trends.
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