PMI Data Warmer Commodity Mid Term Performance Will Fall

The latest data show that China's Manufacturing Purchasing Managers' index (PMI) data recovered in March.

Analysts pointed out that although the inventory pressure is still outstanding, but if PMI and other important economic data continue to warm up, commodities will show a marked decline in the mid term characteristics.

Inventory pressure is still outstanding.

In March 31st, the National Bureau of Statistics Service Industry Survey Center and the China Federation of logistics and purchasing released the purchasing managers' index (PMI) of China's manufacturing industry in March.

Data show that in March, the PMI value of manufacturing industry was 50.5, up 1.3 percentage points from the previous month, rising to the top of the ups and downs and hitting a new high since October 2018, but still below the same level in the past two years.

Among them, the PMI production index increased by 3.2 percentage points to 52.7 last month, while the new orders index also rose 1 percentage points to 51.6.

Chuan Cai securities analyst Deng Lijun analysis, in fact, observed the performance of the PMI index in the past ten years, almost all in March than the uplink, but this production index is larger than the uplink, which is the highest level in the past ten years. At the same time, the import and export situation also shows that the import index rebounded more strongly than the new export orders, which is expected to be related to the investment focus of the infrastructure investment.

The situation of high production is favorable for GDP to stabilize in a short time, but in the case of weaker demand than output, the medium term will lead to greater inventory pressure.

The inventory cycle is the short-term economic fluctuation of the investment variables such as the enterprise stock.

PMI, as an important indicator of cyclical fluctuations, has a close relationship with the price of bulk commodities.

New lake futures related research believes that the inventory behavior of enterprises affects the price of bulk commodities.

Commodity prices rose during the inventory rebuilding phase, and commodity prices fell at the end of the inventory phase.

According to the PMI's own inventory data and empirical research on international commodities, the stock cycle of bulk commodities is more obvious, especially agricultural products and soft goods.

At home, the agency analyzed the data from China's PMI inventory and domestic Shanghai rubber, Shanghai copper and Lian beans, and found that the correlation between domestic commodities and China's stock cycle is very obvious.

In the period of de stocking, the prices of Shanghai Rubber and Shanghai copper fell, and the prices of Shanghai Rubber and Shanghai copper rose during the rebuilding stage of enterprises.

From the historical data of Lian bean, the price performance in inventory reconstruction stage is better than that in de stocking stage.

Commodity performance is resilient.

According to the analysis of the industry, we can see from the import data of major commodities in China this year that even though the market is basically expecting the economic fundamentals, China's demand for some commodities remains stable or even steadily increasing.

This shows that the current commodity prices have certain toughness.

If future commodity imports remain active, domestic PMI data will rise to positive value, which is likely to reverse market pessimism and boost commodity prices.

According to the ship tracking and port data compiled by Lu Fu, the import of China's coal and iron ore in February was basically the same as that of the same period last year. In the 1-2 months of this year, the import of marine crude oil increased sharply to 9 million 60 thousand barrels per day, up from 7 million 720 thousand barrels per day in the same period last year.

In addition, 1-2 months of ocean coal imports 41 million 100 thousand tons, compared to 42 million 200 thousand tons in the same period last year.

However, judging from the fundamentals of major commodities, there is no obvious action for short-term commodities.

Deng Lijun said that crude oil, short-term Saudi Arabia and other countries in the implementation of a high rate of production cuts, the United States crude oil inventory is still the biggest factor supporting oil prices, but in the medium term, OPEC internal crude oil production cuts are divided, and the surrounding landscape will drop, will suppress the formation of oil prices.

In terms of coal, the coal production has been speeded up recently. At the same time, when the Datong Qinhuangdao line has been overhauled, the port coal has been replenishment in advance. After the end of the heating season, the coal has entered the off-season, and the coal price is not expected to rise systematically in a short time.

In terms of steel products, last week, the stock of rebar continues to be changed, but the intensity of deactivation is slowing down, the kinetic energy of steel price has weakened, and the supply of raw materials is still relatively tight.