Is the bull market in commodities still on the way? A logical inventory of transactions in several major plates

SMM News: recently, the commodity market is making a strong comeback. As vaccines boost risk appetite, copper, a bellwether of the global economy, has soared for months, iron ore has broken records, and crude oil has reached the $50-a-barrel mark. Looking ahead, most institutions believe that the commodity rally may not be over yet.

Judging from the seven sub-indices of grain, oil, soft commodities, non-ferrous metals, building materials, chemical industry and coal, the seven sectors have all risen since November, with the building materials sector up 12.4%, the coal plate up nearly 14%, the non-ferrous plate up nearly 9%, and the grain, oil and chemical sectors up more than 4%.

Black system: both strong reality and strong expectation of transaction

In fact, from a big logical point of view, the entire industrial product market has been trading recently that the global economic recovery next year has triggered the logic of replenishing stocks on the raw materials side, and it is expected that demand for industrial products will gradually return to pre-epidemic levels, or even higher.

"driven by this expectation, not only the black system, but also the recent cumulative increase in copper and aluminum prices in the non-ferrous system is also more obvious. With the recent renewed optimism in vaccines, which has further strengthened market expectations for a recovery in global economic activity next year, crude oil prices, as the 'king of commodities', have begun to benefit, driving fuel oil and asphalt prices Synchronize to strengthen, and market sentiment in the entire energy sector has been boosted. " Founder medium-term futures analyst Liang Haikuan said.

But for the black system, Liang Haikuan said that in addition to the expectation of further improvement in terminal demand next year, the continuous improvement of its own supply and demand structure and the strong price of raw materials have made the increase in the overall building materials and steel index more obvious. Even if it has entered the middle of December, but the current consumption downstream of finished wood is still more exuberant, the speed of going to the warehouse is not falling but rising, and the phenomenon of thread deficiency has begun to appear in some areas. "the off-season of terminal demand is not weak, stronger than expected is the main driver of the recent rise in building materials prices." He said.

The other driver comes from the raw material side. "the prices of iron ore and coke have increased significantly because of their own contradictions this year. For most of this year, the whole black system is priced by the raw material end, and the finished wood price is passively strengthened by the rise of the raw material end price. This is also one of the main reasons why lumber prices can remain relatively strong during the year when the total inventory is significantly higher than that in the same period in previous years. Recently, due to the reduction of Vale's target production for this year and next year, and the obvious recovery of overseas blast furnace pig iron and crude steel production, the market has once again produced a consistent tight expectation for China's iron ore supply and demand next year. The contradiction of iron ore itself is highlighted again, and the future price continues to refresh the historical high value, driving the valuation of the whole steel plate to further improve. " Liang Haikuan said.

In addition, Liang Haikuan also said that the recent rise in steel plate prices also benefited from China's strong exports, and the improvement in overseas demand is an important driving factor for the recent hot roll prices to hit a new high. In the short term, the growth rate of investment in manufacturing will be better than that of real estate, and the performance of plate prices will still be stronger than that of building materials.

"at present, black is not only trading strong reality, but also trading strong expectations." Liang Haikuan analysis said that in terms of finished materials, the current de-storage is still continuing, and the terminal consumption is stronger than expected. The market's previous concerns about a decline in new property starts are waning. Domestic real estate and infrastructure will continue to be resilient next year, and expectations of a gradual recovery in overseas demand will be difficult to falsify for the time being. Coupled with the current raw material end prices are still strong, hot metal costs remain high, short-term building materials and steel plate prices will remain strong. However, recently, the whole black disk has been fully reflected in the optimistic expectations of the future, which can be seen from the recent relatively obvious near-weak and far-strong trend between contracts. In particular, the recent cumulative increase in the price of iron ore at the raw material end has been relatively large. The profits of the current disk steel mill in the 05 contract have been compressed obviously, and there is an expectation of upward repair in the future, and there is a risk of technical correction in the short term of the main iron ore contract.

He suggested that the operation of the current black department should not continue to chase high, more than the previous single can try to gradually stop the surplus to leave the market. The main contract between the varieties can try to do the multi-screw ore ratio, and the contract can try the anti-nesting operation of how far the moon is empty and the month is close to the month.

Coal: domestic output is low and imports are low

The recent continuous rise in thermal coal has also attracted market attention. In the view of Zeng Xiang, a German futures analyst, there are two main reasons why thermal coal prices have been rising recently: first, the supply this year has been affected by 25 years of inverted inspection, and the output has been on the low side in the early stage, while imports are limited by quotas in the second half of the year. Less imports. Therefore, whether domestic or import supplement, the supply is difficult to get a good supplement. The inventory in the middle and lower reaches has been in a low state, and there are great regional differences, in which the inventory of inland terminals is higher, while in coastal ports and terminals with large import demand, the inventory is still on the low side before the peak winter. Second, after entering November, with the upside of vaccines, there has been a "bull market" in most commodities, which has led to an increase in the electricity consumption of the entire industrial products, and at the same time, there has been a rapid cooling in the country in late November. it further aggravates the daily consumption demand of terminal power plants. This allows coastal power plants, which already have low inventories, to accelerate the release of procurement demand. The superposition of insufficient supply, low inventory and rapid growth in demand has triggered this wave of prices.

Zeng Xiang said that the main logic of the current trading of thermal coal is that the supply has reached a bottleneck in the short term, and as the domestic production is approaching the end of the year, the coal mine is not willing to increase production further. As for imported coal, Australian coal is temporarily unable to clear customs, most of which have arrived in Hong Kong and can pass through customs are low-calorie coal, and because the quantity of imported shipments has been at a historical low level, the amount of imported coal to Hong Kong in the near future is also on the low side. While the demand is entering the most prosperous moment, the supply can not stop the rapid decline of inventory, and the inventory of power plants in some areas has reached the warning line.

"however, with the passage of time, the overall supply and demand situation is expected to gradually ease." Zeng Xiang said: first, at present, shipping profits have reached a record high, and traders are very active in shipping, which has changed from the previous railway plan to the need to queue up for a ride. Second, some terminals ordered large quantities of Colombian coal and South African coal in early October. These high-calorie coal will begin to arrive in Hong Kong in mid-December. At the same time, after the loosening of imported coal in November, the terminal has also ordered a large amount of Indonesian high-calorie coal. It will also begin to arrive in Hong Kong in mid-December, and this part of the import volume can also play a role in stabilizing coal prices and alleviating the pressure on supply. Third, the impact of the epidemic is still there, and it is expected that some enterprises and institutions will have a holiday ahead of time this year, such as schools. This will also lead to a decline in daily consumption demand ahead of time, entering the traditional Spring Festival off-season.

Non-ferrous metals: the force that determines the trend still lies in macro expectations.

In terms of non-ferrous metals, Shanghai copper, Shanghai aluminum, Shanghai zinc and other varieties have shown a strong performance recently. from a macro point of view, the market has strong expectations of rising inflation next year, superimposed a weak dollar cycle, and strong non-ferrous financial attributes, thus gaining stronger support. From a fundamental point of view, the dominant inventory of copper, aluminum, zinc and other varieties is generally low, the inventory-consumption ratio is low in the same period in history, and the overall pace of demand recovery at this stage is still faster than supply.

"at present, the core focus of the non-ferrous metals sector is macro expectations and capital flows. From a macro point of view, short-term expectations are suspected of being excessive, and governments need to pay attention to their statements on loose policies. We need to guard against the impact of less-than-expected monetary or fiscal stimulus. The short-term rapid rise in the perspective of funds has brought the pressure of profit outflow, and the recent fluctuation of market sentiment is also relatively large, so we need to pay attention to the capital flow at the end of the year. " Cao Yang, a senior analyst at East Securities Futures Nonferrous, said that from a variety point of view, copper, aluminum and zinc all need to pay attention to the short-term changes in inventory at the end of the year, and now it seems that the pressure of accumulation is not small. In addition, the supply of copper and zinc from overseas mines is also the focus of market transactions. After the recent rapid rise in nickel, we need to pay attention to downstream feedback, including the attitude of stainless steel plants towards raw materials, and the attitude of new energy battery enterprises towards raw materials. Whether this price increase can be successfully transmitted from top to bottom and accepted by the terminal is the key. On the whole, we think it is necessary to guard against the risk of rising and falling prices of these varieties in the short term.

Cao Yang believes that for the non-ferrous sector, the force that determines the trend still lies in macro expectations, and the most critical thing in the first quarter of next year is still the market's views on policy marginal changes, inflation cycle, and weak dollar cycle. it is necessary to guard against the revision of market expectations brought about by marginal changes in policy. From a fundamental point of view, the inventory change of domestic non-ferrous varieties before and after the Spring Festival is the key. According to the seasonal law, there will be a tired stock before and after the Spring Festival, but the range is more critical compared with the same period of history. The risk of price correction brought by exceeding expectations is also a point that the market needs to consider at this stage. In addition, the recovery of foreign demand in the first quarter of next year corresponds to changes in overseas inventories.

Agricultural products: be on guard against the risk of rising and falling

In terms of agricultural products, with the recent harvest of corn and soybeans coming to an end, their prices have also shown signs of rising and falling, and the tight supply pattern has eased somewhat.

"in September, there were three consecutive typhoons in Northeast China, and the lodging of corn was very serious, which made the market very pessimistic about corn production in Northeast China and boosted the price trend. Due to abundant precipitation, new soybeans have high water content and can not be directly used for processing, delaying the listing cycle of new soybeans, causing traders to be bullish and hesitant to sell. Especially in November, the good news of novel coronavirus vaccine also promoted the overall rally of commodities, and the influx of international hot money also boosted the overall price of grain. " Wang Xiaohui, an analyst at Eastern Stock Exchange Futures, said: however, with the recent harvest work coming to an end, soybean and corn production is basically scheduled in Northeast China. The typhoon only increased harvesting costs and did not cause a large-scale reduction in production. At the same time, the pace of grain sales by farmers is also accelerating, and the increase in market supply puts greater pressure on prices. In addition, in view of the rise in grain prices, the state has also issued corresponding policies to regulate and control. China's stored grain stops the rotation of soybeans in some parts of Northeast China, and an auction of temporary stored corn is launched in Jilin in December to increase effective supply in the market. as a result, grain prices have gone up and down.

Looking to the future, Wang Xiaohui said that with the concentrated listing of new crops, the prices of corn and soybeans may fall periodically in the future, and traders with large hoarding volumes should hedge a certain proportion in the futures market to avoid the risk of a sharp fall in prices. In terms of corn, farmers sell grain at a faster pace than in the same period in previous years, while China's corn imports also exceed the same period in previous years. It is very obvious that the north and south hang upside down, and a large amount of new corn is hoarded in the hands of traders. In the coming month, with the approach of the Spring Festival, farmers' grain sales will usher in a small peak, and the periodic increase in supply will bring greater pressure on prices. Once the price of corn falls, it will also put pressure on the mentality of traders, and the concentrated sale of traders is likely to lead to a more obvious drop in prices. Therefore, for some time in the future, we need to pay close attention to the grain sales rhythm of farmers in producing areas and the mentality of traders. " She said.

Oil sector, since November, the market bullish atmosphere is strong, but recently there are signs of high consolidation. Since November, the strength of the oil sector has been mainly boosted by the export preference of US beans and the rise of US beans caused by dry weather during the South American soybean growing season, the decline of soybean oil stocks due to domestic soybean oil consumption preferences and the low inventory caused by poor Malay palm oil production. Among them, the strength of American beans and soybean oil is the main driver of the recent rise in oil, which can also be confirmed by the recent widening of soybean brown price gap. In addition, the strong trend of crude oil has also boosted the atmosphere of the oil market. " Guotai Junan futures analyst Liu Jiawei said.

She said that the oil horizontal market oscillation in the past two weeks was mainly due to the weakening of the marginal factors driving the rise in prices. It is understood that the recent decline in US bean exports and improved weather in South America have led to a high decline in US beans, while the domestic soybean oil harvest chu may be delayed, and the high base difference of soybean oil has led to traders' caution in buying goods, and other factors have also weakened the boost effect on oil and fat. In terms of palm oil, poor Malay palm oil exports led to a lower-than-expected decline in inventories. In addition, in recent days, there have been sporadic local confirmed cases of COVID-19 in China, which also have hidden worries about oil consumption. Last week, due to the poor profit of domestic palm oil imports in the first quarter, palm oil prices rose, leading to palm oil 02 contracts to hit a new high, but the trend of soybean oil and rapeseed oil was still relatively weak, as palm oil disk import profits improved. Palm oil futures prices fell quickly on Friday night.

"at present, the main trading logic of soybean oil lies in the factors such as beautiful beans, domestic consumption, collection, sale and storage, while the main trading logic of palm oil lies in the origin, and the change of origin inventory has a great impact on the disk. Rapeseed oil is in a state of price and no market, and the supply and demand are both weak. because the disk is light, rapeseed oil mainly follows other oils, and the main concern for rapeseed oil itself is delivery. The seller's willingness to deliver and the buyer's willingness to take delivery have a greater impact on the relative strength of rapeseed oil in oils and oils. " Liu Jiawei said.

In her view, oil funds may be more cautious before the Spring Festival. On the one hand, oil prices have risen to a seven-year high, and the intention of capital profit-taking may be strong; on the other hand, palm oil, the leading oil producer, is likely to increase production next year. From the past several rounds of oil rise cycle, the turning point is generally in December or January. At present, Malay palm oil inventory is at a low level in the same period in history, and the time window of the weather city in South America has not been closed, which may also support oil prices, but in the current time and position, it is not cost-effective for oil to continue to catch up with the risk-return ratio. In the later stage, we will focus on the weather conditions in South America, Malay palm oil inventory and domestic oil consumption.

"with the end of the year approaching, the commodity market has fluctuated greatly recently, and the willingness of bulls to take profits may increase after the recent continuous rise in the commodity market. Investors are advised to pay attention to position management and light position operation, in addition to fundamental changes. We also need to focus on changes in market sentiment." Liu Jiawei warned.