Wenhua Commodities, CRB Index Rose 18% In Half A Year, Black Price Rise Was Blocked By Multi Departments

Three years ago, the rise in domestic commodities came from the supply side structural reform. This year, it is more inclined to the demand side.

On December 16, the national development and Reform Commission (NDRC) pointed out that coal prices in the spot market have increased recently In the future, through increasing supply and regulating demand, the coal price in the market will be stabilized at a more reasonable level.

This is not an example. The prices of bulk commodities including coal, coke and steel industry chain, non-ferrous metal futures, as well as upstream raw materials such as fine differentiated products, lithium batteries and papermaking all rose significantly in the second half of the year.

Take the two main indices that track a basket of goods. The CRB index closed at 137.97 points on June 30, and rose to 163.02 points on December 15, with a cumulative increase of 18.16% in half a year. During the same period, the Wenhua commodity index, which tracks 47 domestic varieties, rose from 140.54 points to 165.74 points, a cumulative increase of 17.93%.

The rise of some commodities is regarded as "deviating from the fundamentals of supply and demand". Recently, CISA has made several public statements, and has communicated with vale, BHP Billiton and Rio Tinto iron ore giants through video conference in half a month to discuss the recent price hike and pricing mechanism.

On the other hand, Taishang and Zhengshang firms, which are concentrated in the variety of coal, coke and steel industry chain, have also played a combination of adjusting margin and transaction fees.

Although the attitude has been made clear, commodity prices have their own rules. Will this round of price rise come to an end?

Information map.

Demand leads to systemic rise?

In the coal, coke and steel industry chain, except for iron ore which is influenced by vale and other giants, most of the products are priced independently in China. Because of this, whenever its price rises sharply, it will be questioned by the outside world.

In 2016, there was a situation that rebar futures exceeded the daily turnover of Shanghai and Shenzhen stock markets. Although this is only a gimmick, it ignores some basic product features. This year, no exception, the rise in the price of iron ore has once again aroused many doubts.

"The recent sharp rise in imported iron ore prices deviates from the supply and demand fundamentals, there are abnormal traders bidding to boost the index rise, futures market is close to the delivery month of long positions and other acts to create market tension, call on the relevant regulatory authorities to intervene as soon as possible." Luo Tiejun, vice president of China Steel Association, pointed out.

As for the upward trend of ore price, he has made many speeches recently. However, under the situation of "1000 yuan iron ore", the output of steel mills increased and increased again, the inventory of import ore port decreased, and the terminal demand improved.

Cold rolled sheet, the main downstream of the automobile and household appliances, and these two industries in the second half of the recovery is very obvious.

"Most of the steel output brought about by the high output of steel enterprises is consumed by the market. The downstream demand is indeed very stable, and even has the possibility of exceeding the expected consumption." He Hangsheng, an analyst in the steel industry of the business association, pointed out.

In his opinion, the reason for the price rise of cold rolling for 8 months also includes the "explosive" demand impact caused by the continuous growth of automobile production and sales data in the second half of the year.

It should be pointed out that while the prices of self priced bulk commodities have risen, the prices of non-ferrous metals priced internationally have also maintained an upward trend, and the upstream raw materials sector has almost kept rising in the second half of the year.

The settlement price of Luntong copper futures at the end of June was 6039 US dollars / ton, which reached a new high of 7973.5 dollars / ton on December 11, with the largest increase of 32%. Over the same period, Wenhua nonferrous metals plate index rose 18%, building materials plate index rose 28%, and chemical plate index rose 21%.

The rising commodities are not limited to the basic raw materials with futures, such as lithium carbonate, rare earth, silicone, titanium dioxide, papermaking, etc.

This newspaper reported at the beginning of this month that the average price of battery grade lithium carbonate in East China has risen to 48300 yuan / ton. In early November, the price of the product was only about 44000 yuan / ton.

Regardless of the deep-seated reasons such as its own capacity cycle, the rebound of its price hit the bottom is also driven by the demand of new energy vehicle production and sales.

When talking about the rise in coal prices, the national development and Reform Commission also pointed out that "this winter, due to the strong demand for coal in power, steel, building materials and other industries, and the low temperature, the coal demand for heating has increased significantly compared with previous years."

At the end of 2018, when the main logic of pushing up commodity rebound was obviously weakened, the reporter of 21st century economic report once communicated with Jing Chuan, chief economist of CUHK futures, whether the price driving force can be switched from the supply side to the demand side?

Now, the terminal demand suppressed by the epidemic situation has been released intensively, which has caused the price change of upstream raw materials.

Recently, Jingchuan also expressed a similar view, "in the second half of the year, domestic demand was delayed and concentrated, resulting in the mismatch between supply and demand of some commodities, leading to price rise. If the new crown vaccine can be successfully implemented, similar situation may occur in overseas markets in the first half of 2021. ".

As economies recover from the epidemic, the demand for upstream raw materials is bound to increase, which will provide support for the commodity market. It is also in this logic that research institutions including securities companies are so optimistic about the improvement of the industry in 2021 cycle.

Black series products are blocked

Although there was a collective price rise in the second half of the year, the relevant departments and institutions that have expressed their views on this issue have also focused on the varieties of coal, coke and steel industry chain.

On December 16, the national development and Reform Commission (NDRC) said at a press conference, "judging from all aspects, the overall supply and demand of coal in the current coal market is balanced, and the coal supply this winter and next spring is guaranteed The spot market coal price has increased, because the power plant mainly uses the annual medium and long-term contract purchase coal, so the current coal price is generally stable

In addition, at present, more than 80% of the coal supply is implemented in the medium and long-term coal contracts, and the transaction price is between 540-550 yuan per ton. The price rise of the remaining small part of the market coal will not affect the people's livelihood coal security. In the future, we will increase supply and adjust demand to guide the market coal price to stabilize at a more reasonable level.

Prior to this, domestic coke futures have been rising for two months, and the main contract of coke in Dalian Mercantile Exchange rose to 2644 yuan / ton from 1968 yuan / ton at the end of September.

Superimposed on the upward trend of iron ore price, the profit space of domestic steel enterprises, which had been hard to live, was greatly squeezed. Before that, the China Steel Association has been calling for several days.

In addition to communicating with iron ore giants such as vale, CISA also organized iron ore market symposiums held by state-owned and private enterprises such as Baowu, Shagang, Angang, Shougang, Hegang, valing steel and Jianlong.

The participating enterprises believe that the current rise in iron ore prices has deviated from the supply and demand fundamentals, greatly exceeding the expectations of steel mills, and there are obvious signs of capital speculation.

Here we need to introduce a concept of "trading position ratio", which includes futures exchanges and futures companies to measure the degree of speculation of a single futures variety.

From this perspective, iron ore futures speculation has increased, but the change is not too obvious.

In early November, before the current round of iron ore futures rose, its trading position ratio remained between 1.1 and 1.7 times. Since then, the mine price has gone up, the position has increased slightly, and the transaction has risen steadily, which can not exceed 2.2 times on December 8.

Generally speaking, the trading position less than 2 times is not high for domestic active futures varieties. In other words, the early iron ore futures speculation is still at a reasonable level.

It was not until December 11, when the news of "calling for investigation of iron ore speculation" came out from the above-mentioned iron and Steel Enterprise Forum, and the market long short game intensified, the index rose sharply to 3.3 times.

It is in this context that large and Zheng trading houses, which are more concentrated in the listing of coal, coke and steel industry chain, have recently launched regulation and control.

On December 9, the Zhengshang Exchange issued a risk warning letter for steam coal futures; on December 10 and 14, it raised the margin standard and the range of up and down board twice; on December 11, it adjusted the service fee standard.

DCE, on the other hand, has cooled the iron ore market by issuing risk warning letters, adjusting trading margin standards, and adjusting single day opening limits.

It should be pointed out that the above-mentioned are conventional control measures, aiming to increase the transaction costs of investors. They are a kind of market-oriented regulation method. In 2016, the black series market has seen many times.

In practice, it will have a phased "foam" effect.

Recently, the accumulated funds of iron ore futures also showed signs of small withdrawal. For three consecutive trading days from December 14 to now, the total position of iron ore futures dropped to less than 800000 hands, while in the early stage of pulling up, it once exceeded 950000 hands.

However, in the long run, commodity prices will return to their own supply-demand relationship. Especially when the upward or downward trend is established, it is difficult to reverse it.

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