Where Are The New Shorts Behind The Commodity Crash? A Shares Rose!

At present, the domestic market is showing more and more clear two trends: stock market bull and commodity bear, which may be pushed by a new trading strategy, and a large amount of capital is drawn from the commodity market and flows into the stock market.

Since the beginning of this year, international iron ore prices have been cut by half, and copper has fallen by 13%. Domestic screw steel has fallen by 35%, and the prices of coking coal, coke and rubber have all fallen sharply.

On the other hand, after many years of silence, China's stock market finally broke out in the second half of the year. Since the central bank cut interest rates, stock index has increased by more than 1% on a number of trading days, and this year's cumulative increase has reached 30%.

Over the past few years, influenced by the continuous rise of A shares, the fluctuation of domestic varieties in the futures market has increased significantly, and the strategy of buying stock index and selling commodities has become popular.

Reuters quoted a Singaporean trader as saying that many Chinese private equity funds often buy stock index futures while shorting one or two other futures contracts.

Zhou Liang, a futures analyst at the Yangtze River, wrote in the latest report that the current macro hedge view is to make more stock index futures short for black (preferred iron ore), and the stock allocation is mainly based on stock index futures, followed by treasury bonds futures.

He estimated that iron ore, rebar, rubber, zinc and aluminum will continue to show a trend of capital outflow in the future.

along with

The price of some commodities continues to be under pressure.

Reuters even mentioned that it was China's massive efforts to accelerate the collapse of commodity prices.

According to his report,

The establishment of a large empty warehouse resulted in copper prices hitting a four year low in March.

The latest shortage of Shanghai copper is likely to fuel the drop in copper prices this week to four and a half years.

"Many copper futures are based on hedging strategies to hedge against the stock index and iron ore or rebar."

Reuters quoted traders as saying.

As for the latter

From a macro point of view, China's economy continues to slack, supply exceeds demand in the commodity market, and investor confidence is hit. With the opening of the interest rate cycle, the market's further easing of the central bank is expected to intensify, and the financial sector is constantly leveraged.

Futures analyst Qi Zhiyun believes that in the new situation, selling stocks to buy stocks is a long-term and effective strategy.

Real estate and commodities have long been falsely high in policy, and the stock market has been in a long-term downturn because of the long term policy.