In March, the prices in the upper reaches of the real economy rose and the demand in the lower reaches weakened. In March, the prices of upstream commodities generally rose, and the commodity price index (total index) broke through the 200 mark, rising to 203.05 (the second highest in the year) on March 18, an increase of 14.4% compared with the same period last year. By industry, the price indexes of all industries showed an upward trend. As of March 28, the average original oil prices of Brent and WTI were US $117.7/barrel and US $105.96/barrel respectively, up 13.5% and 10.7% month on month respectively. Copper and aluminum were stronger and upward, and copper and aluminum prices increased by 2.5% and 4.5% month on month respectively.
Non ferrous metal prices generally rose in March, with copper and aluminum prices surging upward. In March, the Russian Ukrainian conflict worsened one after another, peace talks and repeated, driving the sharp fluctuation of commodity prices. In the context of geopolitical conflict, countries have increased the rush purchase and reserve of resource products. At the same time, affected by the rise of international oil prices, countries have increased capital investment in non-ferrous metal sectors such as new energy and new infrastructure. Superimposed on the impact of rising energy prices, the rising trend of bulk commodity prices is obvious, including copper and aluminum. However, in the short term, the hawks of the Federal Reserve and the easing of Russia Ukraine have suppressed the prices of non-ferrous metals, and the rise of copper prices is under pressure. The medium-term supply side capacity expansion still needs time and space, with support.
At the end of March, the average price of Brent and WTI crude oil fell slightly, but remained high. The interruption of the Caspian pipeline Union (CPC) oil pipeline, the attack on Saudi oil facilities and the decline of crude oil stocks in the United States, combined with the lack of progress in the Russian Ukrainian negotiations, exacerbated the market's concerns about the shortage of crude oil supply. The crude oil price rose sharply in March, approaching the previous high. By the end of the month, Russia stopped military activities near Kiev and Chernigov, making it possible for a new round of dialogue, and crude oil prices fell. At the same time, the global covid-19 epidemic resurged, especially in China, there was no inflection point in the short term, offline consumption and transportation were still restricted, and crude oil demand weakened.
There are three reasons for the rise in commodity prices. First, on the supply side, the conflict between Russia and Ukraine affects the supply of commodities and continues to worry about supply tightening. Second, the gap between supply and demand remains, and the structure is tight. Third, China's steady growth policy has boosted the demand side.
On the supply side, Russia and Ukraine are the main suppliers of global commodity trade. In March, the conflict between Russia and Ukraine reached an impasse, which disturbed the commodity market. The spiral of multinational game escalated. Due to the Western sanctions against Russia, the sentiment of crude oil supply shortage continued to rise, and the crude oil price rose sharply in March. Market sentiment is unstable. Countries have increased the rush purchase and reserve of resource products. At the same time, affected by the rise of international oil prices, countries have increased capital investment in non-ferrous metal sectors such as new energy and new infrastructure. Superimposed on the impact of rising energy prices, the rising trend of bulk commodity prices is obvious.
The structure at both ends of supply and demand is tight. In addition to seasonal interference, South American resource countries are also affected by the epidemic and the low vaccination rate of covid-19, which suppresses the mining and transportation of minerals and slows down the increment; On the demand side, although the quantitative easing policy in developed countries is nearing the end, the high household savings rate may still keep the demand for commodities high. The imbalance between supply and demand has driven up commodity prices.
The steady growth policy boosted the price of black industrial products. In addition to the influence of external markets, China's steady growth policy also provides support for commodity prices, mainly black commodities such as coking coal and coke. In the context of fiscal preponderance, the rising potential of infrastructure is obvious, ushering in a "good start", and the improved demand for industrial products drives the resonant rise of prices.
The trend in the middle reaches is slowing down, the export in March is not optimistic, and the geographical conflict is superimposed with the interference of China's epidemic. After the year-on-year growth of exports from January to February is 16.3%, the export may slow down in March, the economic expectation will decline, the pull of external demand will weaken, the performance of collection and distribution transportation is poor, and the CCFI and BDI indexes will drop.
BDI index and CCFI index all fell this week. After reaching a short-term high of 2727 points on March 14, the BDI index began to decline and fell to 2417 points on March 29, but it was still higher than the level in the same period. Affected by China's epidemic situation and geographical conflict, CCFI and BDI indexes continued to fall in March. The conflict between Russia and Ukraine caused energy shortage in Europe, economic pressure, weakening foreign demand, and China's export level will fall. As of March 25, CCFI fell back to the level of early December last year. The slowdown in peripheral demand and the recovery of production capacity in emerging economies may have an adverse impact on China's exports.
The downstream terminals remain weak, the epidemic has repeatedly impacted on consumption, and the recovery is weak. The prosperity of the real estate market has not improved significantly, and the land transaction of commercial housing sales is still in the doldrums. Both wholesale and retail sales of passenger cars went down, the growth rate turned negative, and the demand side weakened. In the real estate market, as of February, the data of commercial housing sales and land transactions were still in the doldrums, but the marginal improvement policy continued to promote. In March, the first house loan continued to decline, reaching 5.28% (the previous value was 5.39%), and a series of policies in the later stage are still expected to boost market confidence. Affected by the covid-19 epidemic in China, the demand side of passenger cars is under pressure. Since March, the wholesale and retail sales of passenger cars have changed from positive to negative. As of March 27, the wholesale and retail sales of passenger cars have decreased by 5% and 29% year-on-year (the previous values were - 21% and - 29% respectively).
Risk tips: unexpected macroeconomic changes, intensity of demand recovery, secondary epidemic outbreak and vaccine progress, etc.
