In 2021, the world’s major commodity price indices all hit historic highs. Analysts believe that in 2022, under the background that the global epidemic has not yet been fully controlled, the IMF has lowered its global economic growth forecast. Due to expansionary macro policies, inflation levels in major developed economies around the world are at high levels, and the Fed’s attitude has changed from “dove” to “dove”. “Eagle”, especially the upcoming interest rate hike in March may bring downward pressure on commodities, making it difficult for commodities to replicate the bull market in 2021. Therefore, investors need to be highly vigilant about the risk of significant corrections in commodity prices to avoid being caught at high prices. At the same time, the uncertainty of international geopolitics and the epidemic has also added many variables to the trend of commodities.
Agricultural products: expected to have a “good start”
During the 2022 Spring Festival holiday, boosted by bullish factors such as rising international crude oil futures prices and expectations of tight supply of global agricultural products, the prices of agricultural products in the external market fluctuated, and the agricultural product sector hit multiple historical annual highs. Among them, CBOT US soybean futures prices hit a new high since February 2014, CBOT US soybean oil futures prices hit a new high since 2009, CBOT US corn futures prices hit a new high since 2014, and ICE US cotton futures prices hit a new high. A new high since 2012, BMD Malaysian palm oil futures prices hit a new high since its listing. According to the future prices of agricultural products in the external market, which have mostly hit historic highs, the author expects that domestic related agricultural products will have a “good start” when they open on the first day after the Spring Festival.
International crude oil futures prices move toward the 100-yuan mark
As the king of commodity pricing, the rising international crude oil futures prices have brought solid support to the rise in commodity prices. As of February 4, the CRB Commodity Index closed at 261.29 points, setting a new high since 2015. At present, geopolitical risks still exist, and the international market is worried about causing local turbulence, causing crude oil prices to rise sharply. Although OPEC+ has increased production by 400,000 barrels per day in accordance with the production reduction agreement, due to the limited capacity of countries such as Nigeria and Angola to increase production, OPEC’s overall production reduction implementation rate has remained high. Due to the recovery of the global economy, air shipping activities have increased, and the demand for crude oil has been strong. U.S. crude oil inventories are at historically low levels. Overall, the current crude oil market is still in a tight balance between supply and demand, and it is expected that international crude oil futures prices will still have the momentum to hit the 100-yuan mark.
Global soybean supply remains tight
The global supply of soybeans remains tight, and soybean futures prices hit new highs. As of February 4, the closing price of the U.S. Soybean 03 contract was 1,556.75 cents/bushel, a weekly increase of 5.79%; the closing price of the U.S. Soybean Meal 03 contract was 444.4 cents/short ton, a weekly increase of 7.92%; the U.S. Soybean Oil 03 contract closed The price was 65.41 cents/pound, a weekly increase of 0.18%. In the 2021/2022 cropping season, South American soybeans encountered La Niña weather during the sowing and growing stages, which seriously damaged soybean production in the new season. Authoritative forecasting agencies, including StoneX and the United States Department of Agriculture, have successively lowered South American soybean production, which has reduced global soybean supply. The road to repair has lengthened the time cycle, and the global soybean inventory-to-sales ratio dropped to 17.45%, down 1.12% from last month and hitting an 8-year low.
There is currently market news that StoneX has lowered its latest soybean production forecast for Brazil to 126 million tons. If the forecast comes true, there is room for another reduction in the global soybean inventory-to-sales ratio. Currently, my country’s oil mills have 4.289 million tons of soybean stocks, at a five-year historical low, and soybean meal stocks of 268,000 tons, both of which are historically low. U.S. soybean futures prices have begun to rise before the Spring Festival, but Chinese oil plants are not active in buying ships and setting prices, which makes domestic procurement face a passive situation. Therefore, U.S. soybean futures prices do not rule out the possibility of moving towards the 1,700 cents/bushel mark. Domestic soybean meal Futures prices are expected to return to highs above 4,000 yuan/ton.
Palm oil still leads oil sector gains
The concept of biodiesel coupled with supply-side tensions has led to Malaysian palm oil still leading the oil and fat sector. As of the close on February 4, the closing price of Malaysian palm oil was RM5,621/ton, a weekly decrease of 0.21%. During the Spring Festival holiday, compared with the rapidly rising international crude oil, Malaysian palm oil fell back to a certain extent after hitting a new listing high of 5,700 ringgit/ton, but this did not hinder the rising expectations it brought to the market. Currently, the market’s focus is on Indonesia’s policy of restricting palm oil exports. Indonesia stipulates that 20% of domestic palm oil production must be sold domestically. As of 2021, Indonesia’s palm oil production is 44.5 million tons, exports are 29.5 million tons, exports account for 66% of total production, and domestic consumption is 18 million tons. In 2021, Indonesia’s domestic consumption accounts for 40% of total production. If according to Indonesia’s new regulations, 20% is increased on the basis of the original 40%, it will reduce expected exports. Whether this is understood, we still need to wait for further policy interpretation from the Indonesian government, but currently the market is more inclined to increase the amount on the original basis. If the price increases by 20%, then Indonesia’s domestic export restriction policy in 2022 will cause a shortage of global palm oil supply. The Indonesian Palm Oil Association stated that Indonesia’s palm oil exports in 2022 will drop by 3% year-on-year. In addition, in January 2022, the Indonesian government stated that it was already conducting road tests on B40 palm oil biodiesel. In 2020, Indonesia will force the withdrawal of B30 biodiesel. The implementation in the country is acceptable. According to the Indonesian Palm Oil Association, biodiesel accounts for approximately 38% of Indonesia’s domestic palm oil consumption, reaching 6.8 million tons.
<�� is 9.81%, much higher than the 4.1% in 2021. Although market supply pressure still exists, it is still necessary to pay attention to the periodic impact of environmental protection and other factors on PVC supply. From the demand side, real estate has a greater impact on the demand for PVC. In 2021, banks' tightening of financing for real estate companies has caused real estate investment to decline. However, it promotes the healthy development and virtuous cycle of the real estate industry, superimposes prudent fiscal policies and RRR cuts, etc. The combination of boxing will produce certain positive signals for the financing of real estate companies, so it is expected that the real estate industry will improve in 2022, and the demand for PVC will also rise accordingly. In short, although the cost support of PVC has weakened and supply pressure has increased, demand is expected to improve. It is expected that PVC prices will show an oscillating trend in 2022, with the oscillating range being 7,000-10,000 yuan/ton.
PTA market outlook continues to be weak
PTA has been affected by oversupply for many years. In the past two years, domestic PTA has once again reached a peak in production, and the problem of overcapacity continues unabated. In this case, PTA prices will continue to run near the cost line, and it is difficult to rise deviating from the cost. From a supply perspective, in 2021, 8.6 million tons of new domestic PTA production capacity will be put into production, but 5 million tons of production capacity such as Jiangyin Hanbang and Yangzi Petrochemical will be idle for a long time during the year, so the impact of new production capacity on domestic PTA supply is limited. In 2022, the domestic PTA production capacity planned to be put into production will reach 11.1 million tons. Most of the above-mentioned devices will be put into production in the second half of the year. This will have a certain impact on the domestic supply of PTA and further reduce the processing costs of PTA. From the demand side, the demand for PTA orders has shown signs of weakening. However, the current overseas epidemic is becoming more and more serious. It cannot be ruled out that a new round of epidemic control measures in Southeast Asia will cause a return of clothing orders. In short, PTA production capacity is relatively concentrated, and the oversupply pattern continues, making it difficult for PTA prices to improve. Affected by the weakening demand, the contradiction between supply and demand of PTA is difficult to improve, the price will still run at a low level, and the asset allocation is dominated by short allocation.
Based on the above analysis, chemical products will enter a bull market in 2021 under the influence of cost support. However, as the cost-side support weakens, the focus of chemical product prices is at a relatively high level. It may be difficult to replicate the first three prices in 2021 in 2022. Quarterly unilateral upward trend. Overall, supply and demand will once again become the dominant factor affecting chemical product prices in 2022. However, most domestic chemical products have insufficient production capacity, and coupled with the poor external environment, chemical products are likely to show a “tantrum” trend in 2022.
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