Summary and Prospect of commodity market
In the absence of strong drivers, most commodities remained volatile
On Tuesday (December 28), most of China’s commodity futures markets closed higher, most of energy chemicals rose, crude oil rose nearly 4%, No. 20 rubber and low sulfur fuel oil rose more than 3%; most of the base metals rose, international copper and Shanghai copper rose more than 1%; precious metals rose; most of the black series fell, coke fell more than 4%, and power coal and iron ore fell more than 3%; Shenzhen Agricultural Products Group Co.Ltd(000061) Apple rose nearly 2% and corn starch fell more than 1%.
Hot comment: boosted by the supply problem and the expected decline in inventory, the sharp rise in international crude oil prices led to the collective rise of chemical commodities, and copper and other basic metals also followed. The resumption of production of the steel plant was less than expected, superimposed with weak downstream demand and weak operation of ferrous metals. In the future, while China continues to release the signal of stable growth policy, the disturbing factors are also increasing. First, Omicron virus spreads rapidly in many countries, and more and more countries take new restrictive measures; Second, the geopolitical crisis between the United States, Europe and Russia is difficult to solve. The game of Beixi No. 2 affects the expectation of natural gas supply and disturbs the “energy problem” in Europe; Third, the Fed released more hawkish information, and the expectation of raising interest rates in 2022 is rising. Generally speaking, near the end of the year, long and short factors are intertwined, market sentiment fluctuates greatly, and commodity trends are still repeated.
1. Black building materials: supply and demand are weak, and the trend of steel is still repeated.
The new year is approaching, the rush to work in many places is over, the actual demand drops to the freezing point, and there is an expectation of resumption of production in steel mills. In addition, the pilot of real estate tax is about to emerge, the market sentiment turns weak, and the sharp decline of steel has dragged down the collective weakness of black series.
Looking back, under the background of weak reality and strong expectation, the trend of steel may still be repeated: on the one hand, the reality still maintains the pattern of weak supply and demand: 1) the actual demand for steel has declined with the end of catch-up, and the insufficient kinetic energy of spot price rise limits the space for futures rebound; 2) After the completion of the output level control task, the steel plant maintains high profits and has the motivation to resume production, but the resumption of production is still disturbed by the limited production in the heating season, and the recovery range of output is limited. On the other hand, the medium-term expectation continues to improve: China’s steady growth policy is accelerated, the central bank releases the base currency through two standard cuts, and the one-year LPR interest rate is reduced, indicating that the policy is accelerating its force. At the same time, the marginal correction of the real estate policy, the policy expectation continues to improve, and the demand is expected to improve periodically. Under the background of low inventory, once the demand improves, the steel price will rebound significantly, There is no need to be overly pessimistic about the medium-term trend of steel prices.
2. Base metal: inventory continues to go, and there is support below the copper price.
Omicron has spread rapidly all over the world, and many countries have tightened epidemic prevention measures. There are still worries in the market, suppressing market risk appetite. From a fundamental point of view, copper supply and demand are weak, and the price may remain volatile. On the one hand, copper import increased significantly in the fourth quarter of the upstream, and copper inventory continued to increase. However, the tight supply of cold materials still exists, and the price of superimposed sulfuric acid fell sharply. Refinery production is facing certain pressure, and there is a rush to production at the end of the year, and the growth of refined copper output is limited; On the other hand, with the approaching of the new year and the continuous interference of the recurrence of the epidemic, coupled with the rebound in copper prices, the end consumer demand for copper has weakened. However, the current copper inventory continues to decline, and the market presents a tight supply situation, which supports the copper price.
Precious metals: Omicron’s concern is still, the US dollar index is weak, and gold prices rebound in the short term. However, in the medium and long term, the probability of US dollar index will strengthen, and the rise of us real interest rate will suppress gold for a long time.
3. Energy and chemical industry: long and short factors are intertwined, and the trend of crude oil is still repeated.
The three major oil producing countries announced this month that due to maintenance and oilfield closure, some oil production had force majeure factors, superimposed with the continuous de melting of U.S. crude oil inventory, indicating that the supply and demand pattern is still tight, and crude oil prices continue to rebound in the short term. However, the Omicron variant virus has spread rapidly around the world, and market sentiment remains cautious. In the short term, although the crude oil supply side is still tight, the newly confirmed cases in many places in Europe and the United States are still high. Many countries have taken a new round of blockade measures, and the demand is still facing repression. Under the interweaving of long and short factors, the short-term trend of oil price may still be repeated.
In the medium and long term, although the tightening of epidemic prevention restrictions in many countries does have an impact on the demand for crude oil, according to past experience, the limited demand will return with the improvement of the epidemic situation, and the market need not be overly pessimistic. At the same time, with the continuous development of China’s steady growth policy, demand is expected to gradually improve, and crude oil is still likely to rebound in stages. However, it should be noted that according to the existing OPEC + production increase plan, the crude oil pool will accumulate in the second half of 2022. If Iranian crude oil returns to the market, the crude oil surplus will be greater. Focus on the development of epidemic situation and the change of OPEC + production policy in the future.
4. Shenzhen Agricultural Products Group Co.Ltd(000061) : the expected production reduction supports the strong oil operation, and pays attention to the future output changes.
Meidou: the export inspection volume of meidou is still low, which has a certain suppression on the price of Meidu. In addition, the market speculation on the weather in South America has come to an end temporarily, and meidou has been adjusted in the short term. Continue to pay attention to the impact of the weather in the later stage.
Soybean oil: in the week of December 20, China’s soybean crushing volume declined, the downstream delivery speed was basically normal, the soybean oil inventory continued to decline slightly, and the weekly ring ratio decreased by 10000 tons to 780000 tons. The recent decline in China’s soybean crushing profits has restrained the enthusiasm of oil plants to start up. In addition, the preparation before the Spring Festival will be started one after another. It is expected that the soybean oil inventory will remain low in the later stage.
Palm oil: sppoma data show that from December 1 to 25, the output of horse palm decreased by 10.84% month on month, and the decline in output and unit yield was narrower than that in the previous 20 days. At present, Malaysia’s palm oil is still in the production reduction cycle, which interferes with the harvesting work due to the superposition of labor shortage and floods in Malaysia and China. It is expected that the output may not recover significantly before the first quarter of next year. In addition, according to SGS data, from December 1 to 25, the export of horse Brown increased by 0.16% month on month, indicating that the demand for oil has improved.
At present, the oil fundamentals have the characteristics of low production, low inventory and high basis difference, which are very easy to be disturbed by market sentiment and the trend is repeated. With the increasing expectation of horse palm production reduction, palm oil prices rebounded strongly, and beans were also disturbed by the weather. On the whole, the oil price has strong support or strong operation in the short term. Pay attention to the changes of oil production in the future.
