The situation in Russia and Ukraine continues to affect the nerves of the market
On Monday (February 28), China's commodity futures market closed mixed, most chemicals fell, and soda ash and ethylene glycol fell by more than 4%; Oils and fats fell, with vegetable oil falling by more than 4%, and beans and rapeseed meal falling by nearly 4%; Precious metals fell, with Shanghai silver down more than 2% and Shanghai gold down more than 1%; Crude oil was mixed, with fuel oil down more than 1%, crude oil down 0.1% and methanol up more than 3%; Black series rose, hot coil rose nearly 4%, iron ore rose nearly 3%, rebar and manganese silicon rose nearly 2%.
Hot comments: the current development of the situation in Russia and Ukraine always affects the nerves of the market. We believe that there are two main trading lines implied in it: one is that the conflict between Russia and Ukraine and Western sanctions may lead to the interruption of the supply of commodities mainly produced in Russia and Ukraine, such as crude oil, Shenzhen Agricultural Products Group Co.Ltd(000061) , potash fertilizer and other commodity prices will continue to rise. Second, rising inflation expectations have an impact on financial assets. According to the previous analysis, the assets most benefiting from the escalation of the conflict between Russia and Ukraine will be crude oil, Shenzhen Agricultural Products Group Co.Ltd(000061) and other commodities, and the rise of these commodities will further stimulate the rise of global inflation. Considering the limited impact of the situation in Russia and Ukraine on the U.S. economy, and in order to curb high inflation, the Federal Reserve may tighten monetary policy as scheduled, superimpose the escalation of the situation and aggravate the risk aversion of the market, which are not conducive to the stock market and other financial assets.
Of course, if the situation in Russia and Ukraine eases significantly, the relevant assets will return to their basic pricing after the release of short-term sentiment. The market will re focus on major events such as OPEC oil production policy, Iran nuclear agreement negotiation and Fed monetary policy.
1. Black building materials: the demand gradually recovers, and the steel price may be strong.
Steel turnover reached 169800 tons on Monday, the highest since the Spring Festival, indicating that downstream demand is accelerating with the resumption of work. At the same time, with the end of the Beijing Winter Olympics, the resumption of steel production has also been accelerated, and the steel may enter a pattern of booming supply and demand. However, the NDRC's regulation of iron ore and coal prices has increased unabated, and the prices of raw materials are still under great pressure.
In the medium and long term, on the one hand, this year's steady growth has continued to increase, the advance force of fiscal policy, the issuance of local bonds has accelerated, and infrastructure investment is expected to pick up. At the same time, the down payment ratio and mortgage interest rate in some regions have been reduced, the real estate relaxation signal is strong, and the demand for steel is expected to continue to improve. On the other hand, with the end of the Winter Olympics and the beginning of the northern steel mills, the molten iron will continue to rise. In the medium term, the steel may enter the pattern of booming supply and demand, and the price center may rise.
2. Base metals: the situation in Russia and Ukraine continues to deteriorate, and the risk of metal supply remains.
The situation in Russia and Ukraine continues to affect the nerves of the market. Russia and Ukraine have entered the negotiation stage. The situation has eased slightly, the fear of limited supply has cooled, and the metal price has collectively surged up and fell. However, the current situation still faces great uncertainty, market sentiment may reverse at any time, and metal prices may continue to fluctuate at a high level. From the perspective of copper fundamentals, on the one hand, the supply of raw materials is abundant, and the impact of the Winter Olympic Games subsides. It is expected that the smelting operation rate will continue to increase. At the same time, Peru's giant copper mine project is expected to be put into operation in mid-2022, raising the expectation of increased copper supply; On the other hand, the terminal consumption was gradually repaired, and the start-up of copper enterprises continued to rise. If the physical workload of infrastructure construction starts to form in March, the cable consumption will improve more significantly, and the construction of copper bars may recover more than expected. At present, the whole chain copper inventory maintains a low level, which brings strong support to the copper price.
Precious metals: Russia and Ukraine have entered the negotiation stage, the situation has eased slightly, the momentum of further upward movement of gold has weakened, and the possibility of interest rate hike by the Federal Reserve in March is still high, which may continue to suppress the trend of gold.
3. Energy and chemical industry: the situation in Russia and Ukraine is still full of uncertainty, and the oil price may continue to fluctuate at a high level.
In the early morning of the 27th, Europe and the United States announced to upgrade the sanctions against Russia and cut off the connection between some Russian banks and swift system, which exacerbated the market's concerns about the shortage of global crude oil supply in the future and stimulated the rise of international oil prices again. However, Russia and Ukraine began negotiations, and the International Energy Agency also said it would put in strategic crude oil reserves, which may curb the rise of oil prices, short-term oil prices or high shocks. At present, the market generally expects that the first round of negotiations between Russia and Ukraine will be difficult to achieve results. Once the situation worsens again or stimulates the rise of oil prices again.
From a fundamental point of view, the epidemic continues to improve, global energy demand remains strong, and the supply recovery of some OPEC oil producing countries is less than expected, especially the smaller oil producing countries are unable to increase production. Superimposed on the limited increase in shale oil production in the United States, the crude oil market remains tense, and the oil price will continue to remain high in the short term. In the follow-up, we need to focus on the impact of the situation between Russia and Ukraine, the Iranian nuclear negotiations and the OPEC + oil production policy on both ends of crude oil supply and demand.
4. Shenzhen Agricultural Products Group Co.Ltd(000061) aspect: the risk of supply interruption is high, and the grease keeps running at a high level.
Meidou: affected by the expansion of the conflict between Russia and Ukraine and the increased sanctions by the west, there is a risk of supply interruption of Shenzhen Agricultural Products Group Co.Ltd(000061) produced by Russia and Ukraine, which stimulates the rise of market sentiment. In addition, due to the influence of La Nina weather, the hot and dry weather in South America continues, which has a great impact on soybean production. Many institutions continue to reduce the expectation of soybean production in South America, and the price of American beans is still strongly supported.
Soybean oil: the monitoring shows that on February 21, the soybean oil inventory of major oil plants in China was 790000 tons, a decrease of 20000 tons over the same period last week. The month on month ratio was basically the same, with a year-on-year decrease of 100000 tons and a decrease of 350000 tons over the same period in recent three years. In recent weeks, it is difficult to significantly increase the soybean crushing volume, and the spot supply of soybean oil is tight. It is expected that the short-term soybean oil inventory will still run at a low level.
Palm oil: sppoma data show that from February 1 to 20, the output of horse palm increased by 11.07% month on month. The production reduction season of horse palm is about to end, and the output continues to rise. In addition, according to its data, from February 1 to 25, the export volume of horse Brown increased by 25.1% month on month, indicating that the export demand continued to improve. The news shows that Malaysia will fully liberalize the border in March, and the labor shortage problem may be improved, which means that the increase in production season has entered, and palm oil depots are expected to gradually recover, but strong demand may continue to support palm oil.
Some consumers said that after the escalation of the situation in Russia and Ukraine led to the suspension of port operations, new procurement has stalled, the risk of supply interruption has been expected to begin to be realized gradually, and the short-term support of oil is still strong. At present, under the background of global soybean, palm oil and rapeseed supply problems, low production, low inventory and high basis difference are still the main dependence of oil bulls. The deterioration of the situation in Russia and Ukraine may lead to the decline of vegetable oil exports such as rapeseed oil, while the sharp rise of international oil prices will further stimulate market sentiment, and the oil price may continue to operate at a high level.
