Under the unprecedented stimulus policy, the inflation rate in the United States reached 5% in May, a 13-year high. At the same time, the average monthly growth of non-farm jobs this year is only 460000, and the overall job creation is still worrying. The Fed meeting and its attitude towards inflation have become the focus of the market, and Federal Reserve Chairman Colin Powell is also facing one of the most important and difficult meetings of his career.
At 2: 00 a.m. on the 17th, the Federal Reserve announced after the meeting that members of the Federal Reserve Monetary Policy Committee FOMC unanimously agreed to keep the target level of the federal funds rate unchanged at 0.25%, in line with market expectations. At the same time, the Fed raised two major management interest rates, raising the upper limit of the federal funds rate range, the excess reserve rate (IOER), from 0.10 per cent to 0.15 per cent, and the overnight reverse repo rate (ON RRP), the lower end of the federal funds rate range, from zero to 0.05 per cent.
In terms of interest rate policy, the statement continued to reiterate the interest rate forward guidance issued in September last year, saying that "the FOMC committee's goal is to achieve inflation of moderately higher than 2 per cent over a period of time in order to achieve average inflation of 2 per cent over a period of time, and long-term inflation expectations remain well anchored at 2 per cent."
The bitmap released after the meeting shows that, like the bitmap released in March this year, all Fed officials expect interest rates to remain unchanged this year, and for a longer time after 2023, most Fed officials expect interest rates to rise to 2.5%. Above the Fed's long-term target of 2%. This time, more than 70% of Fed officials expect the Fed to raise interest rates within 2023. If the Fed raises interest rates by 25 basis points at once, it will raise interest rates at least twice from its current level by the end of 2023.
The Fed also announced after the meeting that it would keep its current bond purchases of $120 billion a month unchanged, in line with market expectations. The QE guidelines, like the previous four meetings, said: "We will increase our Treasury holdings and buy at least $80 billion of Treasuries and $40 billion of institutional mortgage-backed securities ((MBS),) every month until substantial progress is made towards full employment and price stability."
At a press conference after the meeting, Federal Reserve Chairman Colin Powell said that the meeting talked about reducing QE, but not formally. He did not disclose the exact timing of the reduction in QE, but said that the meeting did not discuss whether it would be appropriate to raise interest rates in a particular year, which was still a "very distant future".
After most Fed officials expected the dollar index to rise above 91 for the first time in a month, the yield on 10-year Treasuries rose the most in three months after most officials expected to raise interest rates twice in 2023. The pan-European stock index hit a record nine days in a row. Us Oil continued to hit a new high for more than two-and-a-half years. Buyou hit a two-year high for five days and fell after the day's trading. Lun Copper closed out of its trough in more than seven weeks.
Before the announcement of the Fed's decision, New York gold futures had fallen for three consecutive days by the end of trading. COMEX August gold futures closed up 0.3 per cent. New York gold futures dived after the Fed's decision, falling below $1810 an ounce at one point, down as much as 3 per cent in after-hours trading. COMEX July silver futures closed up 0.4 per cent, but silver also fell in late trading, approaching the $27 / oz mark at one point and down nearly 3 per cent in after-hours trading.
International oil prices continue to rise
Recently, the international oil price has risen more rapidly. Yesterday, Midea Oil continued to hit a two-and-a-half-year high, while Buyou hit a two-year high for five days in a row. SC crude closed up 0.33% at 458.5 yuan per barrel yesterday. Boosted by international oil prices, energy and chemical sectors all rose in varying degrees. Among them, the main contract of asphalt fell after rising more than 2% in intraday trading, closing up 1.95%. The main contract of high-sulfur fuel oil was once painted at a new high of 2.43% to close at 2700 yuan / ton, while the main contract of PTA rose 3.13%, and the main contract of staple fiber and ethylene glycol rose 1.73% and 1.17% respectively.
"the rise in oil prices has been increasing in recent days, on the one hand, due to rising concerns about tighter supply and demand in the crude oil market, and the continuous delay of the Iran nuclear deal with the advent of the peak consumption season, which makes the market worry about a shortage of supply. The International Energy Agency has called on OPEC to continue to increase supply after July; on the other hand, judging from the interpretation of supply and demand of crude oil, oil prices will continue to move upward." Yang an, head of energy and chemical research and development in Haitong Futures, said that it is necessary to pay attention to whether the Fed's interest rate meeting resolution has any action to tighten liquidity, and commodity markets are generally nervous about this. If the loose environment is maintained in the end, oil prices are likely to remain strong for some time to come.
However, according to Zhong Meiyan, director of energy and chemical industry at Everbright Futures Research Institute, oil prices are still in the logic of rising, and as oil prices rise further, market fear of heights also begins to emerge. On the supply side, the market will return to focus on the US-Iran negotiations after this week's Iranian presidential election. At present, the market expects the progress of the Iranian negotiations to be slower than expected, and the supply shock may be postponed to the third and fourth quarters. On the demand side, the recent pace of removing crude oil from storage is better than expected, and the operating rate in Europe and the United States has gradually rebounded. " She said.
Zhong Meiyan said that in the post-epidemic period, the marginal increase in demand brought about by the economic recovery in Europe and the United States will still support the steady rise in oil prices. In addition, the market pays attention to the Fed policy and believes that in the context of overall easing, the logic of macro inflation continues to confirm that oil prices are expected to continue to receive multi-allocation of macro funds.
"for now, we will pay more attention to the smoothness of price transmission on the demand side. Domestic oil products as a whole are still strong, but the rise in crude oil has also eroded refinery cracking profits, resulting in downward cracking profits. At present, the sharp rise in oil prices will make the energy industry chain suffer the heavy pressure of a substantial increase in costs, which will weaken the driving force for the transformation of industrial chain products, and will also counter the rise in oil prices. At present, the driving force of demand recovery is still there, so the price is still on the strong side. " Zhong Meiyan said.
As an industrial blood, crude oil plays an important role in energy transportation and other links. Yang an said that higher crude oil prices will drive up economic operating costs at all levels, and it is obvious that excessively high oil prices will bring inflationary pressure, which is not conducive to economic recovery. This is why both China and the United States are wary of high oil prices. Too high oil prices will hurt the economic recovery, countries will also introduce relevant policy measures to cool oil prices when necessary, in addition, excessive oil prices will in turn curb demand for crude oil, which in turn will curb the excessive rise in oil prices.
For the future, the US-Iraq agreement has become one of the biggest influencing factors. According to Zhong Meiyan, negotiations between the United States and Iraq are still under way, and the lifting of sanctions will bring a wave of supply shocks. "before the 2018 sanctions, Iran's production peaked at 3.8 million b / d, so once Iran is liberalized and returns to pre-sanctions levels, supply will increase by 1.4 million b / d, which will reverse the current balance of supply and demand." as a result, there is a monthly supply glut in the market, the logic of removing crude oil from the depot in the future is difficult to continue, and oil prices will turn weaker. "
Yang an believes that the United States has confirmed that the export sanctions against Iran will be lifted, and the Iranian side has also indicated that it has reached an agreement with the major powers on energy. The question now is when the sanctions can be lifted. At present, it will basically be postponed until after Iran's presidential election on June 18.
"Iranian crude oil is still 1.5 million barrels per day from its normal production capacity. Once it returns, it will certainly put some pressure on the market from the supply side, which depends on the speed of the return of Iranian crude oil. After six months of repeated testing, it is expected that the market is relatively fully prepared for the return of Iranian crude oil, so the return may cause short-term oil price fluctuations, but will not affect the strong pattern of crude oil. " Yang an said.
Cost-side boost drives polyester prices stronger
June 16, with the night crude oil rose again, PTA oscillation higher, yesterday's closing PTA main contract rose more than 3%, leading the entire chemical sector, staple fiber and ethylene glycol also changed the previous weakness, there was a relatively obvious increase. In response, Zhu Lihang, an analyst at Zhejiang Merchants Futures, said that at present, various varieties of polyester plate have low profits at this stage, basically hovering near the profit and loss line, and have a strong correlation with the cost end. At this time, the strong price of polyester products will be driven by the strength of the cost side.
"the sharp rise in the polyester sector is closely related to the sharp rise in crude oil at the cost end." Tianfeng futures analyst Liu Siqi said that global inflation expectations superimposed crude oil demand continued to recover, driving oil prices to maintain a strong trend, short-term cost-side drivers of chemicals are still strong.
Founder medium-term futures analyst Zhai Qidi said that recently, coal prices, oil prices continue to rise, as of June 15, PTA spot processing fees have been reduced to 416 yuan / ton, if taking into account acetic acid, PTA spot processing fees for 134yuan / ton, naphtha ethylene glycol profit of-31.86 U.S. dollars / ton, PTA and ethylene glycol valuations are compressed to a low, low valuation superimposed cost drive, futures prices rise strongly.
It is understood that PTA social inventory is high, which has become the main variety of air distribution in the past two years, so the price of PTA has been weak. This year, acetic acid and coal prices have soared and embezzled the profits of the industry. Large enterprises have reduced supply for three months in a row, but domestic demand has increased steadily, exports have been greatly reduced due to reduced production of foreign installations, and PTA social inventory has continued to decline. In particular, futures warehouse receipts have dropped from nearly 400000 at the beginning of March to about 150000, especially in Zhejiang, while local Liwan and Huabin installations have been stopped for maintenance, and Yisheng Petrochemical has reduced its supply. Regional supply tends to be tight. Last week, the PTA processing gap fell to less than 400 yuan / ton, acetic acid on another 8000 yuan / ton, PTA lack of profit pad, oil prices climb to the PTA market transmission more smoothly. Therefore, the rise in PTA prices during the day is more passive with the rise in oil prices. " CIC Anxin futures analyst Pang Chunyan said.
"whether the increase in costs is sustainable depends on the acceptability of the lower reaches. At present, the terminal is in the off-season, the inventory pressure at the weaving end is great, the operating rate of Jiangsu and Zhejiang looms is slow, and the production efficiency of polyester filament and polyester staple fiber is low, so the driving sustainability caused by short-term cost is not strong. In the medium term, the market is currently looking forward to orders in the second half of the peak season, paying attention to whether the expected increase in orders in the peak season at the end of July and early August can be realized. At that time, if there is a low valuation and strong cost-driven cooperation, the sustainability of the price rise will be stronger. " Zhai Qidi said.
In the view of Jiang Shuopeng, a futures analyst at the earth, the strong support on the cost side forms a strong uplink driver for PTA, but the short-term fundamentals of PTA do not change much, and there is pressure on prices above the weakening supply and demand in the medium term. The overall high level of short-term PTA processing fees has dropped, reaching 600 yuan / ton at the beginning of June, but now it has fallen back to 400 yuan / ton, and it is expected that it will still be under pressure in the short term. Some devices on the supply side are still being overhauled, the short-term load has declined, there are not many maintenance devices in the later stage, and the load is expected to pick up in the later stage. At the same time, 3.3 million tons of Yisheng new materials are expected to be put into production, and the supply increment will be provided from June to July. The overall pressure on the supply side is on the high side. " He said.
"on the whole, the main reason why the polyester industry chain products can maintain the rise is that the profits of the industry chain have been compressed to a low level. except for the short-term de-stocking state of PTA, the fundamentals of ethylene glycol and staple fiber are relatively weak, but the profit compression space of the three is not large, so they can rise with the crude oil end." Liu Siqi said that in terms of PTA, it is expected that the state of going to the warehouse will be maintained from June to July, and the fundamentals are relatively strong. Since the first quarter, with the rise of crude oil and PX at the cost end, acetic acid, the auxiliary material, has also reached a record high, driving the cost end of PTA to move up and the processing fee to remain low. PTA equipment centralized maintenance under low profit, high maintenance loss from March to now, demand to maintain high start-up, PTA continues to go to the warehouse, the fundamentals are strong. Although absolute inventory is on the high side and inventory is falling rapidly, the fundamentals support the price rise under low profit.
With regard to ethylene glycol, Zhai Qidi said that the recent ethylene glycol units of 800000 tons / year in Zhejiang Petrochemical Company and 600000 tons / year in Sanning, Hubei Province have successfully produced superior products, and the new production capacity has been released more smoothly. at the same time, there was a large amount of goods arriving at the main port of East China in mid-early June, and the import volume rebounded significantly. Although some coal chemical plants are followed up and overhauled, on the whole, the pressure on the supply side of ethylene glycol is still high, and under the stable demand for polyester downstream, it is difficult for the supply and demand side to form an upward drive to the futures price for the time being.
In terms of staple fiber, Jiang Shuopeng said that at present, apart from the cost-side factors, the drive is not obvious for the time being. Fundamentals, the current staple fiber start decline, inventory continues to accumulate, factory profits are low, fundamentals show a weakening trend. At present, the start-up of downstream yarn mills is slightly reduced, and the overseas recovery of terminal demand is slow, and we still need to wait for the pick-up of terminal demand.
In Pang Chunyan's view, staple fiber is a relatively promising variety. However, due to the speculative hoarding from the fourth quarter of last year to the first quarter of this year gradually released to the market with rising prices, resulting in a mismatch between supply and demand in the staple fiber market, prices remained low, and industry production was in a break-even state in May. Manufacturers have been forced to cut production and industry profits have been slightly repaired, but so far it still looks poor. The market is optimistic about the peak consumption season in the second half of the year, which is expected to bring about a rebound in the staple fiber market and the repair of profits. At present, staple fiber profits are hovering low, passively following the fluctuation of raw materials.
In fact, oil prices have risen nearly 50% since the beginning of the year, hitting new highs, but PTA and ethylene glycol have not risen as much as crude oil. In this regard, Liu Siqi said that the main reason is that PTA and ethylene glycol themselves face the contradiction between the supply and production cycle and the sharp rise in cost.
"the sharp rise in oil prices is mainly due to difficulties in the return of some production capacity on the supply side, and on the demand side, due to global concerted 'anti-epidemic', the main travel demand for crude oil has recovered quickly after the epidemic has been brought under control. As downstream chemicals, PTA and ethylene glycol are still in the private refining and chemical centralized production cycle, with a large amount of production capacity released at the supply end, and although the demand side resumes a relatively fast operating rate to maintain a high level, it is still difficult to digest the increment brought by supply, so from a fundamental point of view, the fundamentals of the polyester industry chain are weak, so it is difficult to make obvious profits. When the profits of the industrial chain are compressed to a low level, the fundamentals drive little, and the crude oil at the cost end will become the main variable that affects the price of the polyester industry chain. " Liu Siqi said that in the current contradictory pattern between the production cycle and cost of PTA and ethylene glycol, the profit of shorting PTA and ethylene glycol can be considered when the cost end drive is small, and when the profit of the industry chain remains low, the polyester industry chain is more likely to follow the cost end drive.
Zhu Lihang also believes that the current polyester chain terminal textile demand is still weak, large production capacity is expected, polyester products do not have the driving force to continue to rise, supply and demand drive is still downward. "since the beginning of this year, polyester products represented by PTA have been facing the situation of deviation between supply and demand and cost-side drivers. After profits are compressed to the profit-loss line, prices will follow cost fluctuations, but this rise is not sustainable. Once international oil prices begin to adjust or oscillate, polyester prices will fluctuate accordingly. From the current production situation of PTA and MEG, follow-up profits are still difficult to improve, and prices mainly follow cost fluctuations. In terms of staple fiber, the current weakness of the downstream textile industry has a more direct impact on staple fiber. Although staple fiber has been put into production less this year, profits still need to wait for the textile market to warm up, which is more difficult in the short term. " He said.
