A meso perspective of inflation differences between China and foreign countries: there is a trend deviation in the prices of mainstream commodities outside China. We have counted the price difference trend of a large number of varieties outside China in the fields of energy, metals, chemicals and Shenzhen Agricultural Products Group Co.Ltd(000061) and found that the price rise of overseas cyclical products is generally much higher than that of China, which has led to the continuous deviation of the price of a large number of cyclical products outside China in recent year: in terms of energy, the price of China and imported coal has been inverted; The overseas relative price of ferrous metals in industrial metals generally rose to a higher level since 2008; China's relative prices of non-ferrous metals fell sharply, and zinc / lead / aluminum were close to historical extremes; Among chemicals, the price of chemical fertilizer in China has relatively dropped to the historical extreme value, including rubber, PX, styrene and PTA Shenzhen Agricultural Products Group Co.Ltd(000061) from the point of view, except for soybeans, the price difference between China and foreign countries of most Shenzhen Agricultural Products Group Co.Ltd(000061) (wheat, corn, cotton, soybean oil, etc.) continues to converge, that is, China's relative price decreases. The more violent rise in overseas prices is a typical feature of bulk commodities in the past period. The commonness is reflected in that from energy, industrial metals, chemicals to Shenzhen Agricultural Products Group Co.Ltd(000061) , the tide of global inflation has not systematically poured into China.
The factor of lower inflation in China is reversing in the future. First, as China's most important energy, coal has become a better anti inflation asset in China: at present, the price difference between oil, gas and Chinese coal after converting into the same thermal value has reached a record high, and has become a better resource for China to reduce inflation at the source; Second, in the process of continuous appreciation of the exchange rate, it is a good form to resist imported inflation. On the one hand, it inhibits the demand for exports. On the other hand, the US dollar is the valuation currency of major bulk raw materials, and the appreciation of RMB against the US dollar in the past has also played a role in preventing imported inflation to a certain extent; Third, since the fourth quarter of last year, China's demand has experienced a sharp decline, reaching the recession level, which also makes the inflationary pressure not upward. At present, the above factors are reversing: first, with the rising price of imported coal, there is a contradiction between lowering energy prices and not causing supply shortage; Second, the RMB exchange rate has begun to enter the weakening channel, the exchange rate's resistance to inflation has weakened and may even strengthen, and China's main metals copper, aluminum and gold have begun to strengthen significantly compared with overseas; Third, in the future, due to the pressure of employment and debt stability, the realization of stable growth in China is still a high probability event, and the recovery of demand will also increase the inflationary pressure again.
Signal from industrial chain inventory: inflation that will be ignited at any time. As of March 2022, whether from the perspective of absolute value of inventory or year-on-year growth, the inventory of raw materials in the upstream of the industrial chain of industrial enterprises (such as coal, oil and gas, non-ferrous metals, etc.) is mostly at a medium low level compared with history, while the middle and downstream manufacturing industry is on the contrary, mostly at a medium high level in history. This data can also be verified in the field of industrial products. It is worth thinking that since 2011, in the process of multiple inventory cycles in the middle and lower reaches of the manufacturing industry, the growth rate of upstream raw material inventory has decreased for a long time, and has fluctuated around 0 for a long time after 2016. At present, although the upstream products also experience a small accumulation of inventory, its amplitude and absolute level are historically low, and even weaker than some de stocking stages in history. Considering that the upstream enterprises were generally in the historically high capacity utilization range in the first quarter, this means that once the demand in the downstream recovers and the inventory in the middle and downstream is partially digested, the relatively low inventory in the upstream will be quickly transmitted to the pressure on the supply side. In the longer term, the desirable raw material inventory of manufacturing enterprises experienced a long-term decline after 2011: raw material inventory / cash and raw material inventory / current assets fell for a long time. In the era of excess capacity of bulk commodities and complete supply chain security, the above business preferences can certainly reduce costs by reducing redundancy. However, when bulk commodity prices are easy to rise and difficult to fall, global supply chain security is no longer safe and effective, and the downward trend of desirable inventory level will be reversed?
Welcome the tide of inflation. Unless China's economy collapses, upward inflation seems inevitable. Similar to the United States in 2020, the impact of the epidemic on the economy is inevitable, but China's economic policies can still make up for the impact of the epidemic on the economy in 2022 through physical consumption and Investment: if the infrastructure based approach is adopted, it will put more pressure on raw materials, while the optional consumption stimulus policy needs higher government expenditure support due to its low multiplier effect. The resumption of work after the epidemic in May may may be a respite period for relevant growth stocks in the middle and lower reaches, providing an excellent window for investors to complete the switching layout. In the future, the price difference at home and abroad, the recovery of demand and the entry of RMB into the weak range will jointly drive the return of inflation, and the inflation elasticity will still be stronger than the economy itself. Our recommended idea is: what will benefit more from the change of demand: non-ferrous metals (copper, aluminum and zinc), sectors (with large price difference and tradable manufacturing industry), highly deterministic energy and Shenzhen Agricultural Products Group Co.Ltd(000061) : oil and gas, thermal coal, Shenzhen Agricultural Products Group Co.Ltd(000061) (corresponding to chemical fertilizer with large price difference outside China); Inflation and the benefits of RMB Valuation: gold; The global price difference has expanded and the supply chain has been reshaped: resource transportation (oil transportation, dry bulk transportation).
Risk tip: the Fed raised interest rates more than expected, and the impact of the epidemic on the supply chain is more than expected
