Li Keqiang issued another alert: respond to the commodity price surge

Since 2021, commodity prices have skyrocketed. Li Keqiang 14 in the State Council Standing Committee issued another alert, requiring the response to the impact of commodity prices soaring, strengthening monetary and other policies with.

Comprehensive land media reports, Li Keqiang presided over the State Council executive meeting on May 12, asked to track and analyze the situation at home and abroad and market changes, do a good job of market regulation, to deal with the rapid rise in commodity prices and its collateral effects. Strengthen monetary policy and other policy coordination.

This is the fourth time since April, the Communist Party of China high-level meetings and ministerial conferences mentioned the issue of commodity prices.

On April 19, Meng Wei, spokesman of the CPC National Development and Reform Commission, said at a regular press conference that in recent times, rising commodity prices and global inflation have caused widespread concern from all sides.

On April 9, Li Keqiang hosted a forum of experts and entrepreneurs on the economic situation, some experts and business leaders talked about the sharp rise in international commodity prices, bringing great pressure on rising costs for enterprises. Li Keqiang asked to strengthen the regulation of raw materials and other markets to ease the pressure on the cost of enterprises.

On April 8, a meeting of the Finance Committee, chaired by Liu He, Vice Premier of the CPC State Council and Director of the Finance Committee, emphasized the need to maintain basic price stability, especially focusing on the trend of commodity prices.

The reason for the frequent mention of commodity prices in high-level meetings of the Communist Party of China is that commodity prices, led by copper and crude oil, have been rising since May 2020, and since 2021, commodity prices have been rising, thus triggering inflation in the market.

Since 2021, international oil prices have risen by more than 30%, London copper futures by more than 35%, and the UN FAO food price index has risen for 11 consecutive months.

Comprehensive land media news, May 8, Tianjin Tiansteel, Jiangsu Xugang Group and other 95 steel mills to increase the purchase price of scrap steel, price range of RMB 10 yuan / ton to 200 yuan / ton. On the same day, 19 construction steel companies raised the ex-factory price, the price range of RMB 50 yuan / ton to 230 yuan / ton.

On May 10, the mainland futures market intraday, iron ore, rebar, hot-rolled coil rose one after another, iron ore ton price broke 1,300 yuan; coking coal futures main contract also once rose more than 7%; rebar single ton over 6,000 yuan.

According to statistics, since 2021, the mainland has 20 varieties of futures rose more than 20%, of which 10 varieties rose more than 30%, respectively, styrene, glass, hot rolled coil, rebar, iron ore, power coal, crude oil, PVC and Shanghai aluminum.

Driven by the futures market, the A-share 10 morning steel, non-ferrous, coal and other sectors opened sharply higher, and rose strongly throughout the day. Steel sector, Chongqing Iron and Steel, Baosteel shares, Shougang shares and other stocks have risen.

Non-ferrous plate of Yintai Gold, Aluminum Corporation of China, Yunnan Aluminum shares, Yunnan Copper, coal, Tibet Mining, Shanxi Coking Coal, Lu’an ring energy and other stocks also rose strongly.

These three sectors of the day a total of 36 stocks stopped, accounting for 133 stocks in the two cities, 27%. A total of 242 stocks in the three sectors, nearly 90% of the stocks closed in the red, with an average gain of 4.65%.

In the international market, according to the Financial Times news, May 10, the Asian market iron ore prices rose more than 10%, Singapore iron ore futures prices rose to more than $ 226 per ton, a record high in dollar terms.

S&P Global Platts (S&P Global Platts) said that the physical price of iron ore has touched a record high of more than $212 per ton.

On May 11, the U.S. Commodity Research Bureau Spot Index (CRB Index) was at 207.55, up 24.07 percent year-to-date and up more than 95 percent from a low of 106.29 in April last year, a new high since July 21, 2015.

The U.S. Commodity Research Bureau Spot Index (CRB Index) was trading at 207.55 points on May 11, up 24.07% year-to-date, up more than 95% from last April’s low of 106.29, and at a new high since July 21, 2015.

On May 12, methanol futures took up the baton, with the main 2109 contract rising to close at 2,707 yuan/ton.

On the same day, glycol futures main 2109 contract rose 5.77% to close at 5225 yuan / ton; ferrosilicon futures main 2109 contract put a stop, hitting a nearly two-month high of 8286 yuan / ton, turnover, position double surge; manganese silicon also continuous upward, closing up 2.16% at 7662 yuan / ton.

For the issue of rising commodity prices, Xu Yang, chairman of Shanghai Maikerong Information Consulting, told the land media that, first, the rising cost of raw materials has pushed up the prices of commodities in general.

Second, the downstream industry production recovery has formed a tight supply and demand situation.

Third, the financial attributes of non-ferrous metals, some chemical products and other prominent, loose monetary policy, the global economy is expected to improve, etc. pushed up the activity of global futures trading.

Fourth, the financial market short-term speculation also has a significant amplification effect on price increases.

Fifth, the U.S. dollar index entered a phase of weakness.

For how long the commodity rally can continue, Xu Yang believes: “Overall, the black system still has the momentum to rise.”

Goldlink analyst Xu Cuiyun also believes that, in the short term, iron ore prices remain strong, if steel demand falls significantly, steel prices have a major pullback, steel prices drive iron ore down, otherwise iron ore will maintain a strong momentum, short-term easy to rise and difficult to fall.