On March 2, due to the influence of geopolitical factors and the sharp rise in crude oil, gold and many agricultural product futures in the external market, domestic commodity futures were broadly red.
Commodities surge across the board
On March 2, domestic commodities rose on a large scale, mainly involving crude oil and related downstream chemicals, natural gas and agricultural products.
Wenhua Finance data shows that as of the close, the main contracts of crude oil, LU, asphalt, and PTA futures rose by the daily limit, the main contracts of thermal coal and fuel oil futures rose by more than 7%, the main contracts of ethylene glycol and LPG futures rose by more than 6%, and the main contracts of palm oil futures rose by more than 6%. The main contract rose by more than 5%.
Data source: Wenhua Finance
Judging from the outstanding varieties, Jiang Jing, a researcher in the asset allocation group of CITIC Futures Research Department, analyzed to the China Securities Journal·CSI Taurus reporter that the crude oil supply and demand pattern is mismatched, OPEC’s willingness and ability to increase production are insufficient, and supply chain shocks and inventories are superimposed. The objective reality is that the supply is at a historically low level and the supply is inelastic. Against this background, geopolitical risks have “added fuel to the fire”, causing market sentiment to continue to heat up. Oil prices have risen sharply, and natural gas has followed suit.
“Due to the unstable geopolitical situation, Ukrainian ports have been suspended one after another, and the export of sunflower seed and sunflower oil has basically stagnated. Global buyers have turned to purchasing palm oil and soybean oil, and the supply and demand tension has intensified.” Jiang Jing said.
Yuan Tao, chief economist of Melya Futures, said that from the perspective of the direction of the Federal Reserve’s monetary policy, the price of crude oil this time “broke over 100”, on the eve of the Federal Reserve raising interest rates, may completely ignite the enthusiasm of the commodity “bull market”.
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The significant strengthening of the cost side boosted the performance of the downstream polyester chain. Although some parts of EG have reported load reductions recently, the volume is limited and it is difficult to leverage the current market situation of a surge in overall supply. The market’s expected maintenance plan for a major factory failed to materialize. Most of the factory’s clear maintenance plans are after April, and coal chemical industry maintenance restarts are common. However, strong crude oil has led to relatively poor performance in the petrochemical industry. However, to restore profits in the coal chemical industry, we need to pay attention to the production reduction in the petrochemical industry.
The oversupply characteristic of the PTA industry determines that its price will run around the cost line for a long time. Currently, PTA processing fees are at a low level. Due to widespread losses in the industry, many domestic PTA manufacturers underwent maintenance in early February. However, except for the two 6-million-ton units of Yisheng Petrochemical, most of them have resumed production. The current operating load of PTA is at a normal high level. Considering the overall poor operating conditions of the industry, it is difficult to further increase the load. And thanks to the relatively high demand for polyester production, PTA inventory accumulation in the first quarter was not as large as expected.
However, the operating load of polyester is at a high level, and inventory is rising due to poor terminal demand. Enterprises are facing greater pressure to destock. Among them, the inventory of short fiber factories is neutrally high. However, production and sales were good last week, the inventory was reduced, and the inventory of futures merchants is not high. The overall short fiber supply and demand conflict is not very big, but seasonal sales are poor.
In terms of terminal weaving, due to factors such as the epidemic in Jiangsu and Zhejiang and the difficulty of workers returning to work, the terminal weaving industry has been slow to resume work after the Spring Festival, which directly led to the backlog of upstream polyester inventory. Judging from market feedback, there are only a small number of spring and summer orders domestically, and most of them are orders before the Spring Festival. In foreign trade, due to rising raw material prices and rising sea freight, the negotiation time between buyers and sellers has lengthened, and traders’ resistance has increased. Overall, the end market is still in a stagnant stage, and the consumption of finished goods inventory in factories has slowed down.
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