Summary and Prospect of commodity market
The commodity index maintained a volatile trend
On Monday (December 27), most of China’s futures market closed down, led by the black system. The main contracts of coke futures fell by more than 6%, rebar and wire rod fell by nearly 5%, hot coil and coking coal fell by more than 4%, and iron ore fell by more than 3%; chemicals fell, polypropylene and methanol fell by more than 3%, PVC fell by nearly 3%; some Shenzhen Agricultural Products Group Co.Ltd(000061) were strong, with palm oil, soybean oil, peanuts and beans rising by more than 1%.
Hot comments: affected by weak demand and expected resumption of production, the black series weakened collectively, the dollar index rebounded again to suppress risk appetite, and metals, energy and chemical industry weakened simultaneously. 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 some 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, the current market sentiment fluctuates greatly, and the commodity trend is still repeated.
1. Black building materials: due to the impact of multiple factors, steel has been greatly frustrated.
The new year is approaching, many places are nearing the end of the rush, the actual demand is greatly weakened, and the expectation of steel mills to resume production is superimposed. In addition, the pilot of real estate tax is imminent, the market sentiment is weakened, and the sharp drop in steel prices 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 lowered, indicating that the policy is accelerating its force. At the same time, the warmth of the real estate policy is frequent, 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 metals: supply and demand are weak, and copper prices remain volatile.
Omicron has spread rapidly around the world. Many countries have tightened epidemic prevention measures to suppress market sentiment. The overall trend of commodities is mainly volatile. At the same time, the strength of economic recovery and monetary policy in the United States and Europe are divided. The dollar index may remain strong for a long time, and metals are facing long-term pressure. From a fundamental point of view, copper supply and demand are weak, and the price may remain volatile. On the one hand, the interference of copper mines outside China continues, Las bambas copper mine announces its shutdown, the transportation of copper concentrate at Erlian port in China continues to be suspended due to the epidemic, and the superimposed TC index continues to decline for two consecutive weeks, indicating that the market is still worried about copper supply; 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 of copper price, the end consumer demand for copper has weakened. However, the current copper inventory is low, which still supports the copper price.
Precious metals: as the energy problem in Europe has been alleviated and the US dollar index has strengthened again, gold is facing repression again. 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 repeated.
U.S. crude oil inventories continued to go, indicating that the supply and demand pattern is still tight, and crude oil prices are supported 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 reserve will probably accumulate next year. 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 market sentiment fluctuates greatly, and the oil trend is still repeated.
Meidou: at present, the market focus is turning to South America. The recent dry weather in southern Brazil has caused market speculation. Superimposed on the good export performance of meidou, it has support for meidou. In the short term, meidou may continue to fluctuate upward.
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: according to the data released by MPOA, the estimated output of horse palm decreased by 13.18% month on month from December 1 to 20, and sppoma data showed that the output of horse palm decreased by 11.09% month on month from December 1 to 25, which continued to expand compared with the previous 15 days. At present, Malaysia’s palm oil is still in the production reduction cycle. Factors such as labor shortage and decline in output growth potential still restrict the output. 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. As the output of horse palm fell more than expected, the tight supply pattern boosted the strong operation of palm oil price. Pay attention to the impact of future oil production and pre Festival stock.
