Crude oil and natural gas prices have consistently exceeded expectations since 21 years, and led to a sharp rise in overseas inflation. In this context, the conflict between Russia and Ukraine has intensified, and the market is worried about international energy prices and inflation. The extent to which the disturbance of international energy prices will impact inflation outside China and how it will affect the volume and price performance of China's subdivided industries has become a hot topic in the recent market.
Russia and Ukraine are very important in the global energy supply chain
Russia is an important crude oil producer and exporter, and its natural gas production ranks second in the world. At present, 40% of Europe's natural gas supply comes from Gazprom, and nearly half of the company's transportation pipelines pass through Ukraine. Although Ukraine has less energy production, the conflict between Russia and Ukraine still has an impact on international natural gas prices.
Background of recent oil price changes affected by the conflict between Russia and Ukraine
The current crude oil price hit a new high in nearly seven years. On the supply side, the US shale oil capital expenditure is insufficient, and the increase in OPEC production is lower than expected. On the demand side, the global transportation basically recovered. The northern hemisphere encountered severe cold weather in January, which accelerated the destocking of crude oil and other energy. In this context, the conflict between Russia and Ukraine has increased the uncertainty of crude oil pricing, or further pushed up the recent rise of crude oil prices. Looking back on the performance of oil prices before and after nearly three wars, the price volatility has indeed increased significantly.
The current round of rising crude oil and other energy prices has different effects on inflation outside China
First, we make three assumptions about the trend of crude oil price and calculate the changes of inflation outside China under the three assumptions. The calculation results show that the increase range of oil price on inflation in China and the United States: US CPI China PPI China CPI.
Second, recently, the national development and Reform Commission has ensured China's production order and intervened in China's commodity pricing, which will help alleviate China's inflationary pressure. China's policy intervention can further hedge the upward impact of overseas energy prices. It should also be noted that historical experience shows that the conflict between Russia and Ukraine does not necessarily mean that oil prices continue to rise at a high speed. The rise of energy prices to global inflation will be followed up.
It is expected that the current round of oil price rise will push up China's inflation, and the impact is different from that in the third quarter of last year
The rise of energy prices such as crude oil has pushed up China's upstream PPI, and whether it will eventually cause the profits and production of middle and downstream enterprises to face similar pressure in the third quarter of last year, which is one of the focuses of the current market on inflation. PPI rose rapidly in the third quarter of last year, driven by the black sector. At the same time of high inflation in the third quarter of last year, China's economy is facing a shortage of coal and electricity; The shortage of power supply restricts the production of middle and lower reaches and has a profound impact. In other words, in the third quarter of last year, the upstream was experiencing high inflation, while the downstream manufacturing industry was facing a shortage of power and raw materials at the same time. This year, the price of overseas energy such as crude oil rose, pushing up the price of raw materials in the upstream, which more affected the cost of raw materials in the middle and downstream manufacturing industry than the problem of power supply. In other words, as long as there is no problem with power supply, the current round of energy prices such as crude oil will push up inflation, and the downstream production order will not be damaged. To sum up, this year's rise in oil prices will push up upstream inflation, which will have a weaker impact on China's economy than in the third quarter of last year.
The current round of oil price rise has two structural impacts on China's subdivided industries
The characteristics of China's industrial structure determine that the impact of rising crude oil prices on industrial enterprises is weaker than that of rising base metals on the industry. In terms of specific operation, we use the input-output table to calculate the impact of rising oil prices on subdivided industries. First, the impact of rising oil prices on the service industry is greater than that on the manufacturing industry. Rising oil prices push up transportation costs, and use this influence mechanism to raise the cost of service industry. In contrast, the manufacturing industry has a weak response to transportation costs. Second, structurally, the rise in oil prices has pushed up the costs of transportation, textile and clothing, Shenzhen Agricultural Products Group Co.Ltd(000061) , furniture, auto parts and other industries, which is more obvious than other industries.
Risk warning: crude oil supply exceeds expectations; The conflict trend exceeded expectations; The game among countries exceeded expectations.
