Premier Li Keqiang chaired an executive meeting of the State Council on July 7 and proposed “the timely use of monetary policy tools such as reserve requirement ratio cuts.” The meeting decided that in response to the impact of rising commodity prices on corporate production and operations, we must maintain the stability and enhance the effectiveness of monetary policy on the basis of not engaging in flooding, use monetary policy tools such as reserve requirement ratio cuts in a timely manner, and further strengthen financial control. The support of the real economy, especially small, medium and micro enterprises, has contributed to the steady and steady decline in comprehensive financing costs. Industry insiders believe that this does not mean that monetary policy will become looser, but it will better support the development of the real economy in the “post-epidemic era” and further reduce the financing costs of small, medium and micro enterprises.
As the White House considers renominating Federal Reserve Chairman Jerome Powell, officials are discussing reshaping the Federal Reserve Board of Governors to more closely align government priorities, such as Tighten banking regulations, etc.
Federal Reserve meeting minutes showed that officials expected to continue to make progress on the threshold for reducing QE. Money market rates were under downward pressure during the meeting and it was thought that these rates could fall further in the near term, with low interest rates leading to rising house prices and valuation pressures in the housing market potentially posing financial stability risks. Inflation rose more than expected, with the rise seen as largely reflecting temporary factors, with participants expecting inflation to fall toward the committee’s long-term goal of 2 percent.
The U.S. Energy Information Administration (EIA) predicts that the price of WTI crude oil in 2021 will be US$65.85/barrel, compared with the previous forecast of US$61.85/barrel. Brent crude oil price was US$68.78/barrel, previously expected to be US$65.19/barrel. Global crude oil demand growth is expected to be 5.33 million barrels per day in 2021, compared with the previous forecast of 5.41 million barrels per day. U.S. API crude oil inventories decreased by 7.983 million barrels in the week to July 2, compared with an expected decrease of 3.925 million barrels, and the previous value decreased by 8.153 million barrels.
WTI August crude oil futures closed down $1.17, or 1.59%, at $72.20 per barrel. Brent crude oil futures for September closed down $1.10, or 1.47%, to $73.43 per barrel.
Domestic commodity futures ended mixed in night trading. Energy and chemical products performed weakly. PTA fell 4.17%, fuel oil fell 2.26%, asphalt fell 2.25%, and staple fiber fell 1.89%. , LPG fell 1%. The black series saw mixed gains and losses, with hot-rolled coils up 2.17%, rebar up 1.61%, thermal coal up 0.73%, coke down 2.72%, coking coal down 1.76%, and iron ore up 0.08%. Most agricultural products fell, with rapeseed oil falling by 1.92%, palm oil falling by 1.24%, corn falling by 0.77%, soybean oil falling by 0.76%, and soybean oil falling by 0.7%.
International oil prices plummeted, and the energy sector turned green
In Amid market concerns, international oil prices fluctuated violently overnight on the 6th. WTI crude oil hit a six-and-a-half-year high, and Brent crude oil hit a new high in nearly three years, the largest single-day drop since June. The domestic crude oil system generally weakened. Yesterday, affected by the sharp drop in crude oil overnight, the energy sector in the domestic market suffered a general decline. The main contract of Shanghai crude oil futures 2108 fell 4.45% to close at 450.9 yuan/barrel. The futures price of the main fuel oil contract 2109 hit a new low in the past month, down 5.46%. , closing at 2,582 yuan/ton, the main low-sulfur fuel oil contract 2109 fell sharply by 3.71%, closing at 3,398 yuan/ton, and the main asphalt contract 2109 dropped sharply by 4.21%, closing at 3,416 yuan/ton.
In the view of Yu Pengsen, an energy analyst at Zhaojin Futures, the sudden sharp decline in crude oil overnight was actually the result of the resonance of multiple factors.
“First, the U.S. dollar index is strengthening, and commodities will normally weaken. The previous night’s strength has intensified the trend of crude oil. Second, this round of rising crude oil prices has been rising for several consecutive months. There was no clear callback during this period. After touching the key weekly pressure level the day before yesterday, the price of WTI crude oil was still unable to break through. Technically, there is a need for a callback, and bulls also need to temporarily take profits. Third, despite the fundamentals of crude oil It’s good, but it’s not as strong as it was before the epidemic. When the OPEC+ meeting failed to produce any results, some funds that were bearish on the crude oil market concentrated on hedging.” Yu Pengsen said that the combination of many factors has caused In the initial decline, when the decline expanded, bulls concentrated on closing their positions and leaving the market, causing another ” stampede “. At present, hot money accounts for a large proportion of the funds chasing long crude oil, and the proportion of institutional positions has declined. It is easy for the market to oscillate in extreme positions and experience sharp rises and falls.
According to the reporter’s understanding, the current uncertainty on the crude oil supply side mainly comes from OPEC. Its meeting has been delayed for three days and still has no results. The meeting planned for Monday was cancelled. The next meeting time Undecided means that the current quota will continue to be maintained in August, and the proposed production increase plan of 2 million barrels per day per month from August to December will not be implemented for the time being.
The main disagreement at the meeting is that the UAE only supports increasing oil production and will not support the extension of the agreement without making baseline production adjustments. The UAE Energy Minister said that the UAE has idled about 1/3 of its production capacity and has made more “sacrifices” than other OPEC members. Market participants said that although OPEC currently maintains its supply policy unchanged, which is a positive factor for oil prices, the breakdown of production negotiations also increases the possibility that member countries will abandon quota constraints and increase supply, and internal conflicts among OPEC have further intensified. There is the hidden worry of “price war”.
“For the market now, the OPEC+ meeting does not have an accurate conclusion that can be used for reference. The OPEC+ meeting has no results, and we don’t know when the next meeting will be. can only be held, so forfell. In addition, the new device Yisheng New Materials discharges materials in one line, and some products have flowed into spot stock, triggering market concerns that PTA will enter a surplus cycle after the new device reaches production. The processing gap of PTA has also been compressed in the process of decline. “Tianfeng Futures analyst Liu Siqi said.
“From a trading perspective, the most direct reason for the sharp drop in PTA is the sharp correction in crude oil prices the night before. Affected traders’ emotions, bulls lacked confidence at this position and significantly reduced their positions. Yesterday, they reduced their positions by more than 190,000 lots within the day. “He Xiaoqin, an energy and chemical analyst at Guotai Junan Futures, said that the surge in PTA futures prices that started last Friday was actually mainly driven by the rise in crude oil prices. The driving force behind the market was the strength of the cost side. After the price rise, end products followed the rise again. At the end of the month, factories enter the market to replenish their inventory, which makes the polyester factory’s product inventory generally depleted. The reasons for replenishment: first, orders for autumn and winter began to be placed in advance; second, the peak season demand in October last year caused the factory to learn lessons and prepare inventory in advance. It is not that a large number of new orders have been received. After the centralized procurement of terminals is completed from the end of June to the beginning of July, it may be difficult to rely on replenishment to drive the PTA market to continue to rise.
He Xiaoqin said that in the early stage, the market was bullish In an atmosphere of strong emotions, yesterday’s plunge made investors regain their composure. “The early bullishness was just a compensatory increase on the cost side, and this plunge is a correction of valuation. Although the market was weak yesterday and sealed the lower limit, the intraday limit was opened, indicating that bullish forces are taking over. The current market trading sentiment has returned to calmness from an excited state. “She said.
In Liu Siqi’s view, the early bullish sentiment on PTA was mainly driven by the superposition of crude oil and fundamentals. On the one hand, the continued rise in crude oil supported the cost of PTA, and the price center of gravity shifted upward. ; On the other hand, with continued destocking, PTA inventory pressure has decreased, and processing fees have strengthened slightly. PTA processing margins have compressed from 650 yuan/ton to around 550 yuan/ton, releasing valuation risks. “From a fundamental perspective , the balance sheet predicts that PTA will still face destocking in July, and the fundamentals have not changed significantly. From a cost perspective, the market is still relatively optimistic about the recovery of crude oil demand. At present, market sentiment has not changed suddenly, and subsequent fluctuations on the cost side may increase. “Liu Siqi said.
“The current processing fee for the 2109 contract is only about 550 yuan/ton, which is medium to low, and the valuation level is not high. Whether the risk is fully released depends on whether oil prices have fully corrected. “He Xiaoqin believes that crude oil is more likely to enter an oscillation pattern next. PTA’s terminal polyester consumption is still expected to have a peak season in the third quarter. The current price transmission of the entire industry chain from top to bottom is stuck in the gray cloth link. Domestic textile and clothing consumption It has gradually recovered to the level of the same period in 2019, and overseas demand has been suppressed by sea freight. If there is a significant improvement in gray fabric production and sales and accelerated inventory digestion, it will gradually open up room for price increases. Overall, we are still bullish on PTA prices in the third quarter, but it will take time. Eliminate the problem of shipping and gray cloth inventory.
“Overall, after the release of valuation risks, short-term PTA costs and fundamentals are still strong, and the current price may still be able to There is an upward drive. From a mid- to long-term perspective, new equipment will still face a surplus cycle after reaching production, and the current price of PTA is expected to remain weak. ” Liu Siqi said.</p
