Correct the campaign-style 'carbon reduction' and enhance confidence in the supply and price stability of bulk commodities

On the one hand, the trend of "carbon reduction" is rising in various places, and on the other hand, the prices of bulk commodities are rising frequently. How to coordinate the peak of carbon, ensure the supply and stable price and high-quality economic development is the top priority. The recent Politburo meeting of the CPC Central Committee emphasized that we should adhere to a national game of chess and correct the campaign to "reduce carbon."

Industry insiders pointed out that the supply and price stability of bulk commodities is intensifying, and relevant parties will strengthen the coordination of carbon peaking and carbon neutrality, and rationalize the relationship between supply and demand through orderly "peaking" and scientific "carbon reduction". Find the best balance between economic development and carbon reduction.

Straighten first and then break to correct the campaign-style "carbon reduction"

Under the guidance of the carbon peak and carbon neutral goals, the wave of carbon reduction is sweeping everywhere.

According to incomplete statistics, as of the end of June, 31 provinces, municipalities, and autonomous regions have issued and implemented action plans for carbon peaking and carbon neutrality. At the provincial level, Shanghai, Fujian, Hainan, Qinghai and other places proposed to take the lead in reaching the peak before the national peak. But at the same time, there are also signs of campaign-style "carbon reduction" such as empty slogans, enthusiastic slogans, or "one size fits all" or excessively advanced actions in individual areas.

"Responding to the long-term "dual-carbon" goal with a short-term campaign of "carbon reduction" may have an excessive impact on some traditional enterprises, which is not conducive to employment and people's livelihood, and it is not conducive to the stability of commodity prices." CITIC Securities Chief of Fixed Income Analysts clearly pointed out that the lack of overall arrangements for the movement of "carbon reduction" in individual places has to a certain extent triggered market expectations that coal and other commodities will significantly reduce production and severely restrict production, boost commodity prices, and make small and medium-sized enterprises more bearable. Great cost pressure.

Fu Xiangsheng, vice chairman of the China Petroleum and Chemical Industry Federation, recently pointed out that when implementing the "dual-carbon" strategic deployment, we must look at and analyze issues dialectically and comprehensively. When researching and formulating implementation plans, roadmaps, and timetables for carbon peaking and carbon neutrality, we must seek truth from facts and make distinctions. We must never "one size fits all" or "go in step", let alone blindly compare with reality. It is necessary to scientifically and rigorously measure the energy consumption and emissions by 2030, in order to determine the peak value of the "peak" and determine the timetable for the "peak". It is necessary to reduce carbon under the premise of ensuring the stability of the domestic power grid, energy security, and economic development.

The recent Politburo meeting of the CPC Central Committee emphasized that it is necessary to coordinate and orderly do a good job in carbon peaking and carbon neutrality, and introduce a carbon peaking action plan before 2030 as soon as possible. After breaking, resolutely curb the blind development of the "two highs" project. The first plenary meeting of the Carbon Neutralization Leading Group held in May also emphasized that it is necessary to respect the law, insist on seeking truth from facts, proceed from reality in everything, and scientifically grasp the pace of work.

"The phased mismatch between supply and demand has caused the price of domestic commodities to rise too quickly and increase the burden on enterprises." Gao Ruidong, chief macro economist at Everbright Securities, believes that the overall and orderly implementation of carbon peaking and carbon neutrality is a game of chess across the country. Under the background, a reasonable and orderly pressure drop in production capacity and stable price expectations by increasing supply are vital to the overall smooth operation of the economy.

The Bank of China research report believes that the relevant departments will strengthen the overall planning of carbon peaking and carbon neutrality, focus on "starting before breaking", and accelerate the development of new energy, power system reform, carbon emission trading and other aspects to consolidate the work. On the basis of ensuring the stable operation of the economy, we will promote the "carbon reduction" work in an orderly manner on the basis of infrastructure construction related to "carbon reduction" work.

Straighten up supply and demand, help ensure the supply of goods and stabilize prices

Analysts believe that scientifically formulating a carbon peaking action plan and promoting carbon reduction in an orderly manner is an inevitable requirement for coordinating development and safety and better promoting high-quality development in the long run. For the moment, it is of great practical significance to do a good job in maintaining the supply and stabilizing prices of bulk commodities.

Since the beginning of this year, the prices of some commodities have risen rapidly. For example, the supply of thermal coal has continued to be tight. After the peak summer, rising energy demand has stimulated the price of thermal coal to rise again. In this context, coal continued to exert efforts to maintain supply and stabilize prices. The National Development and Reform Commission recently revealed that in July, 38 open-pit coal mines in Ordos City resumed production, involving a production capacity of 66.7 million tons per year. In addition, the National Development and Reform Commission and the National Energy Administration recently jointly issued a notice requesting Inner Mongolia, Shanxi, Shaanxi, Ningxia, Xinjiang and other five provinces and regions to extend the formalities for 15 coal mines that have been suspended due to joint trial operation and agree to a joint trial operation time. Extend for 1 year to increase production and supply while ensuring safety.

While resolutely curbing the blind development of the "two highs" projects, relevant departments are also actively promoting the release of advanced coal production capacity, seeking a balance between energy conservation and supply, and between "carbon reduction" and development.

"Corrective campaign-style carbon reduction will help advance the work of ensuring supply and price stabilization." Mingming pointed out that under the rectification of carbon reduction, concerns about supply tightening have been alleviated. Yu eased.

Pan Wei, a coal industry analyst at Galaxy Securities, said that the corrective campaign-style "carbon reduction" will further straighten out the relationship between coal supply and demand, while "cutting carbon" while taking into account the goal of ensuring the supply and price stability of bulk commodities.

The policy is effective, the action on the PPI can be weakened

Although affected by many internal and external factors, the market believes that the year-on-year increase of the industrial producer price index (PPI), which is closely related to the changes in commodity prices, is temporarily difficult to see a significant decline. The risk that the year-on-year growth rate continues to rise sharply has been brought under control.

Since the second quarter, the effects of a series of measures to ensure supply and stabilize prices have continued to appear. Guo Liyan, a researcher at the Decision Consulting Department of the Chinese Academy of Macroeconomics, said that from the changes in the June PPI data, 18 of the 41 industrial sectors experienced a drop in ex-factory prices, which was the month with the largest month-on-month decline since November last year. In particular, the prices of steel and non-ferrous metals have fallen sharply. She believes that in the second half of the year, the year-on-year increase in PPI will still hover at a high level, but the upward momentum will weaken.

Regarding the forecast of July price data, Wind data shows that the PPI in July may rise by 8.9% year-on-year, slightly higher than the 8.8% increase in June this year, but lower than the 9% increase in May.