Ping An View:
Real economy: this week, China’s epidemic spread point by point, the recovery of operating rate was weak, the accumulation of industrial finished products continued, the primary land market was still depressed, most black commodity prices rose, and Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale prices rose. 1) From Monday to Friday (March 7 to March 11), a total of 1683 newly confirmed cases were added in 20 provinces and autonomous regions such as Jilin, Shandong and Guangdong, a significant increase from 364 cases in 19 provinces and autonomous regions in the same period last week. 2) Operating rate differentiation. The operating rate of semi steel tire of automobile tire increased by 11.6 percentage points month on month, and the operating rate of petroleum asphalt plant increased by 2.5 percentage points month on month. However, the operating rate of coking enterprises decreased by 0.2 percentage points month on month; The operating rate of Tangshan blast furnace decreased by 11.9 percentage points month on month. Or due to the influence of the winter Paralympic Games, the two sessions and the production restriction in the heating season, the operating rate of the blast furnace is relatively low. After the relevant restrictions are lifted, the production end is expected to rebound further. 3) Raw materials go to the warehouse. Among the finished products, the rebar factory warehouse + social warehouse fell by 2.8% this week; Last week, electrolytic aluminum inventory increased by 1.9% month on month. In the raw material inventory, the port iron ore inventory this week decreased by 0.9% compared with last week; Coking coal inventory is available for 15.8 days, down 0.2 days from last week. 4) The land market and commercial housing sales are in the doldrums. This week, the average daily sales area of commercial housing in 30 cities decreased by 17.7% month on month, falling for two consecutive weeks, and the recovery rate was only 64.6% compared with the week before the Spring Festival. Last week, the primary land market was still depressed. The land supply area and land transaction area of Baicheng were only 30% and 51% of the week before the Spring Festival (the week on January 30). In late February, the container throughput of domestic trade and foreign trade of the eight hub ports were – 2% and 26.7% year-on-year respectively. The growth rate of foreign trade rebounded compared with the previous value, while the growth rate of domestic trade decreased compared with the previous value. 5) The price of most black goods rose. In addition to thermal coal, the spot price of black series commodity period rose one after another this week. The spot prices of coking coal, coke, rebar and iron ore rose by 4.7%, 6.8%, 1.2% and 0.2% respectively, and the futures prices of corresponding varieties rose by 5.9%, 2.6%, 3.5% and 0.3% respectively; Thermal coal futures fell 4%, but spot prices were flat. This week, the Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale price 200 index rose 1.0% month on month. Among the main Shenzhen Agricultural Products Group Co.Ltd(000061) , the wholesale price of eggs increased by 2.7% month on month, and the wholesale price of vegetables, fruits and pork decreased by 0.9%, 0.4% and 1.9% month on month respectively.
Capital market: this week, the capital level has tightened, the yield of treasury bonds has declined, the main stock indexes of A-Shares have fallen sharply, the US dollar has appreciated strongly and the RMB has depreciated slightly. Under the influence of the two main lines of “stagnation” and “inflation”, China’s capital market fluctuates greatly. Specifically, in the money market, driven by the acceleration of fiscal expenditure, dr007 and R007 closed at 2.16% and 2.10% respectively on Friday, up 11.3bp and 6.8bp respectively compared with last Friday, and the capital level was tightened. In the bond market, the yield of main current treasury bonds fell this week, and the term interest margin of 10y-1y treasury bonds narrowed slightly. In the stock market, all major A-share indexes fell, while the CSI 500 and small and medium-sized board indexes fell significantly month on month, mainly due to the decline of global risk appetite and the rise of China’s inflation expectations under geopolitical conflicts. In the foreign exchange market, the US dollar index closed at 99.13 on Friday, up 0.62% from last Friday. This week, the onshore and offshore RMB depreciated by 0.06% and 0.51% against the US dollar respectively, and the RMB exchange rate maintained strong resilience.
Risk tip: the steady growth is not as strong as expected, the epidemic situation in China is spreading at multiple points, and geopolitical conflicts are escalating.
