The economic recession is expected to intensify, and commodities are selling off on a large scale! On the market, nearly 50 varieties fell, and 10 varieties fell by more than 4%. Among them, PTA once fell to the limit, with a drop of 7%. As of the close, the declines of some varieties were as follows:
Market confidence collapsed?
Neng Hua suffered a collective setback and PTA hit its limit!
Energy and chemical products collectively fell sharply. Fuel oil, PTA, urea, asphalt, etc. collectively fell by more than 5%, and PTA once fell to the limit.
From a broad logic point of view, the continued strengthening of macroeconomic recession expectations has significantly increased market risk aversion, and the inversion of long-term and short-term U.S. bond yields further confirms the economic recession expectations. Against this background, risky assets have been significantly suppressed. Since this year, European and American stock markets and Non-ferrous metals with strong macroscopic attributes all turned downward, and crude oil, as a species with strong macroscopic and financial attributes, will naturally be suppressed.
In anticipation of an economic recession, some institutions have lowered their oil consumption forecasts for this year. At the same time, the recent repeated epidemics in various places have further dampened the prospects for oil consumption. In addition, the API inventory report in the early morning of the 13th showed that U.S. crude oil and refined oil products were fully accumulated last week, and the recent OECD Some high-frequency inventory data from , Europe, Singapore and other countries also show that the oil market position is exhausted, and the crude oil balance sheet shows signs of marginal weakening.
Overall, the trend of crude oil has weakened significantly, and the operating center is expected to gradually decline in the second half of the year.
In terms of PTA, PTA closed at the limit in early trading on the 13th, and TA09 fell by 7%. The market is worried about the increase in crude oil production in the Middle East, and the US CPI for June will be released tonight. The market is expected to continue to increase compared with May, and interest rate hike expectations are strong, causing oil prices to plummet overnight. In terms of raw material PX, the current operating rate of PX is on the high side. Production in the middle and lower reaches of East China may be reduced due to power restrictions, resulting in intensified negative feedback in the middle and lower reaches of the industrial chain. PTA is under obvious pressure in the short term, and from a fundamental perspective, PTA still has some room for downside.
After all the good news, the current market sentiment is pessimistic
Cotton prices may still have room to fall
As the market’s worries about economic recession continue to increase, global cotton consumption is not optimistic in the future, and the external market has continued to weaken recently.
The reserve cotton rotation will open on the 13th. According to the announcement, the purchase and storage will start on July 13, 2022, and the end time will be determined in due course based on the market situation, purchase and storage situation, etc. The total purchase and storage volume is 300,000-500,000 tons, and the daily listing quantity is arranged in a balanced manner and dynamically adjusted in principle. According to the formula for calculating the entry price: on July 13, the maximum price for the entry bidding was 17,550 yuan/ton. Pay attention to the transaction situation of cotton reserve today.
In China, the purchase and storage quantity issued last Friday was only 300,000-500,000 tons, and the price limit was 18,600 yuan for downward bidding. The biggest benefit was far less than expected, which caused the collapse of market confidence and the rapid decline of Zheng cotton.
ICE cotton futures hit their daily limit overnight, weighed down by a strong U.S. dollar and expectations of weakening demand. ICE’s most actively traded December cotton contract fell 4 cents, or 4.2%, to settle at 90.84 cents per pound. The trading range is 90.84-94.90 cents. Group Vice President Jack Scoville said that strong concerns about economic recession, the strength of the U.S. dollar, and concerns about Chinese demand are dominating the cotton futures market. The U.S. dollar is hovering near 20-year highs, making cotton futures relatively expensive for investors holding other currencies.
On July 13, Zheng Cotton’s main contract once fell below the 10,000-five mark, but then the market sentiment gradually eased and finally closed at 15,025 yuan/ton, with a daily decline of 6.99%. ICE cotton futures hit their daily limit overnight, weighed down by the strength of the U.S. dollar and expectations of weakening demand.
Fundamentally, the global cotton market supply and demand pattern will shift to a loose tone next year and remain unchanged. There is still a large amount of Xinjiang cotton for sale in China, the losses of ginners have further expanded, downstream demand continues to be weak, and the situation of my country’s foreign trade exports has become more severe after the tightening of the Xinjiang cotton ban. Overall, the current market sentiment is pessimistic after all the good news, and cotton prices may still have room to fall.
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