Commodity prices stopped falling and rebounded

With the end of the hot and rainy season, the commodity market ushered in the traditional peak season. In addition, the demand of the commodity market has picked up due to factors such as the increase of the counter cyclical adjustment of macro policies and the acceleration of infrastructure construction. At the same time, the growth rate of market supply continued to decline due to the stricter policy of environmental protection and production restriction and the narrowing of profits of previous production enterprises. Overall, the supply-demand relationship of the commodity market improved in September, the overall operation was good, commodity inventories declined, and market prices stopped falling and rebounded. According to the market monitoring of China Logistics Information Center, in September 2019, the overall average price of commodity market rebounded by 2.7% compared with the previous month, reaching the highest level since 2019, and the market price rose slightly again after four months, but still fell by 7.2% compared with the same period last year; the cumulative average price in January-September fell by 3.3% compared with the same period last year, and the decline was 0.6 percentage points larger than that in January-August.

From the perspective of the major industries, the price trends of the five major industries under special monitoring have diverged. Commodity prices such as refined oil, non-ferrous metals and chemical products have stopped falling and rebounded, rising by 4.9%, 1.5% and 1.2% respectively compared with the previous month; raw coal prices have remained unchanged from the previous month; while black metal prices have continued to fall by 0.9%, but the decline has narrowed by 2.7 percentage points compared with the previous month. Specifically:

Oil products, international crude oil prices showed a trend of first rising and then falling in September. At the beginning of the month, the bullish mood of the market became stronger due to Russia's claim of strict production reduction and the deterioration of the situation in the United States and Iraq. Saudi oil equipment was attacked in mid-month, resulting in a daily loss of 5.7 million barrels of production, crude oil prices rose by nearly 15% panic, but Saudi Arabia said that oil production will resume in a short time, and international oil prices will gradually fall in the latter half of the year. Domestic weather began to turn cold in September, but the Mid-Autumn Festival and National Day boosted demand for refined oil. The market demand for refined oil was good. In addition, affected by fluctuations in international oil prices, domestic refined oil prices rose twice, and the average price of domestic refined oil market stopped falling and rose 4.9% in September.

For non-ferrous metals, the start-up rate rose in peak season, the growth rate of market supply accelerated, and the performance of demand side was better than that of earlier period. From January to August, the automotive industry completed 15.939 million vehicles and 16.104 million vehicles respectively, down 12.1% and 11.0% respectively from the same period last year. The decline was 1.4 and 0.4 percentage points narrower than that in January to July, respectively. The situation of the sharp decline in automotive production and sales has improved. In August, the cumulative investment in real estate development fell to 10.5% from 10.6% of the previous value. The growth rate of real estate investment fell for four consecutive months, but the decline in the completed area of houses narrowed to 10% from 11.3% in July. At present, although the real estate market is slowing down, it is still in the rising range, which still supports the market demand of non-ferrous metals. Overall, in September, the supply and demand pattern of domestic non-ferrous metals market improved, with prices rising by 1.5%.

Chemical products market, affected by the stricter environmental protection policy, the plant start-up rate is generally low, and the supply is tight. The downstream is affected by peak season and festival factors, and demand has warmed up. The improvement of supply and demand structure combined with the support of the rising international crude oil prices, the domestic average price of chemical products before the end of the five consecutive months of downward trend, in September to stop falling back to 1.2%. In terms of coal market, the power coal market gradually entered the off-season in September, with weak downstream demand and rising inventory level. On the other hand, the Da-Qin line began to be repaired in mid-September, which limited its capacity and supported the price of power coal in the short term. The coking coal market is affected by the environmental protection policy, the supply is on the tight side, and the blast furnace stove of the steel plant before the festival stops production more, and the demand for coking coal has also declined. Overall, the supply and demand sides of the coal market are relatively weak, and the average market price in September is basically the same as last month. In September, Beijing, Tianjin, Hebei, Shandong, Henan, Jiangsu, Anhui and other places issued heavy pollution weather warning. In addition, the National Day is approaching more stringent environmental protection policies, steel mills stop and limit production increased, and blast furnace start-up rate and daily average hot metal production dropped significantly. After the end of the hot and rainy season, the overall demand warmed up, steel sales were relatively smooth, especially in the second half of the month, demand gradually increased, downstream infrastructure, real estate growth accelerated, and inventory levels decreased. However, as the market remained depressed in the first half of the month, the overall average price of the ferrous metal market fell by 0.9% in September, a sharp decrease of 2.7 percentage points compared with the previous month.