Source: Economic Reference Newspaper
Some commodity futures prices rose
Source: Flush (as of May 10)
Recently, commodities ushered in a sharp rise, the plate transmission effect caused by the price increase of bulk commodities has also emerged, and some head enterprises on the consumer side such as daily chemicals and home appliances have recently issued price increase announcements. Industry insiders pointed out that the continuous easing policy of the world's major central banks and the rebound in production capacity after the economic recovery are the main reasons for the current round of commodity price increases, China's overall inflation pressure is controllable, and the transmission effect of the industrial chain is limited.
Commodities set off a wave of rising prices
The "coal flying color dance" market heated up
On May 10, the futures prices of steel, nonferrous metals, coal and other commodities once again ushered in an "upward tide". According to the data of Flush, as of the close of the day, the main iron ore contract 2109 rose by 10%, the main contract of coking coal 2109 rose by 7.99%, the main contract of thread 2110 rose by 5.99%, the main contract of Shanghai copper 2106 rose by 4.81%, and the varieties of wire rod, hot coil, Shanghai zinc, Shanghai aluminum and other varieties also rose in the front.
On the same day, the relevant sectors of the A-share market rose generally, and some companies touched the limit. Shenwan Mining, Nonferrous Metals and Steel rose by 5.86%, 4.89% and 4.47% respectively, ranking the top three of the 28 Shenwan first-class industry indexes. In terms of individual stocks, a number of listed companies in nonferrous metals, coal, steel and other industries have risen and stopped, among them, Jinling Mining, Hainan Mining, Chongqing Iron and Steel have continuously pulled out the third stop plate, Shanxi coking coal, Xinji Energy, Lu'an Huanneng also continuously pulled out the second stop plate, and the "coal flying color dance" market continued to heat up.
It is worth noting that since the beginning of this year, iron ore, rebar, coking coal, etc. have reached a record high for related main contracts, and varieties such as Shanghai zinc have also reached the price high point this year. Taking iron ore as an example, the iron ore index formed a high consolidation after a new high at the end of 2020, and recently reached a new high. Since 2021, the iron ore index has risen from 990.2 points to 1282 points at the close on May 10, an increase of about 29.47%.
Benefiting from the continuous rise in commodity prices, the stock prices and sectors of related listed companies have moved strongly during the year. As of the close of trading on May 10, compared with the beginning of 2021, The Shenwan Mining Sector, the Steel Sector and the Nonferrous Metals Sector rose by 22.99%, 41.42% and 17.75% respectively. Among them, the stock price of Chongqing Iron and Steel has doubled compared with the beginning of the year, and the stock prices of Tianshan Aluminum, Jiugang Hongxing and Shougang Shares have also increased by more than 50%.
Driven by the bulk market, many pro-cyclical thematic equity funds also performed prominently in the first quarter, and some funds returned nearly 30% in the first four months, far higher than the average level of active equity funds.
Fu Lichun, an economist and founding partner of Yuntai Capital, told the Economic Reference Daily that the rise in commodity prices in this round is driven by two factors: first, due to the impact of the epidemic, the production capacity of the global production and manufacturing sectors has been greatly suppressed, and once restored, there will be a strong rebound, and the demand for manufacturing raw materials such as bulk commodities will rise sharply; the second is the financial capital market factor, in order to alleviate the impact of the epidemic, many governments have issued a large amount of excess currency into the market, resulting in a rebound in commodity prices that were previously at a low level.
Inflation levels are generally manageable
The transmission effect of the industrial chain is limited
It is worth noting that the continuous rise in the prices of raw materials such as commodities in recent days has also begun to be transmitted to some consumer terminals. On April 21, P&G announced that it would raise the price of baby products, adult diapers and feminine care products from September this year, with increases ranging from 5% to 9%. The average selling price of many products in Shanghai Jahwa in the first quarter increased by more than 10% compared with the same period in 2020. According to the statistics of Cinda Securities, in early March, the price of Midea's refrigerator products was raised by 10% to 15%, and in mid-March, the price of Midea's air conditioners was raised across the board; in early April, Oaks air conditioners raised the price of air conditioning products by 5% to 15%. In addition to white electricity enterprises, the average price of kitchen appliances, including integrated stoves and steam boxes, has also risen by a certain extent.
Experts pointed out that China's inflation level is generally controllable. Sheng Laiyun, deputy director of the National Bureau of Statistics, said in a recent interview with the media that for China, although the pressure of imported inflation from the outside has increased, the inflation level is generally under control. Zhong Zhengsheng, chief economist of Ping An Securities, also said earlier that the global commodity cycle has emerged, but the super cycle has not yet arrived.
Talking about the conduction effect of rising commodity prices, Fu Lichun told reporters: "The conduction effect of this round of commodity prices is larger, but the transmission chain may not be so long and the scope is not so wide. In his view, the price increase brought about by the price increase of raw materials, the efficiency of transmission is generally low, and not all industries are in the transmission chain and form price pressure. In some specific industries, only the head enterprises with brand advantages and channel advantages enjoy greater pricing power. However, he also pointed out that some manufacturing companies have no way to fully digest the price increase of raw materials on the energy side, or cause impact and squeeze on the future profitability of enterprises.
Wang Siya, a senior analyst at Lange Steel Network, said that under the premise that there is no change in relevant policies, it is predicted that the trend of commodities in the second quarter is still strong, but at present, the short-term increase has been large. Guojin Securities said that in the second half of the year, some industries or usher in the expansion of new production capacity, for some commodities, the expansion of the supply side or weaken the upward trend of prices, such as the future MDI, pulp and other product prices or face adjustment pressure.