Commodity prices fell again in October

In October 2019, affected by the peak season factors, the situation of domestic bulk commodity market continued to improve, and the industry operation situation improved. However, due to the increasing downward pressure of domestic macro-economy and the unstable international trade situation, the recovery of bulk commodity market was not as strong as that of the same period of previous years. Although both sides of supply and demand have rebounded, the growth rate of supply side is significantly faster than that of demand side, which leads to the increase of market supply pressure and the continuous accumulation of inventory. In this context, the commodity market price in October failed to continue the rebound trend of the previous month, falling 0.2% month on month (MOM) and 5.2% year-on-year (YoY); the cumulative average price from January to October fell 3.7% year-on-year, 0.4% more than that from January to September. From the perspective of major industries, among the five major categories of products to be monitored, except for the rise in chemical prices, the rest of the products showed a downward trend. The prices of ferrous metals, non-ferrous metals, raw coal and refined oil fell 0.3%, 0.9%, 0.1% and 0.8% respectively compared with last month, while the prices of chemical products rose 0.2% compared with last month. Specifically: for ferrous metals, affected by the policy of environmental protection and production restriction and the reduction of market demand, the production enthusiasm of steel mills has obviously subsided, and the market supply has been declining. At the same time, affected by the National Day holiday, the steel market demand overall weakened. Especially after the middle of the year, the temperature in some areas dropped rapidly, the terminal demand gradually contracted, and the overall transaction performance declined compared with last month.

Affected by this, the overall average price of ferrous metal market in October fell by 0.3%, 0.6 percentage points lower than that of last month. In terms of non-ferrous metals, the market demand is in good condition in the near future. The electronics and home appliance industry is about to usher in the double 11, double 12, Spring Festival and other promotional seasons. The production is in the momentum stage, and the demand for non-ferrous metals is showing a large trend. The production festival of automobile and electric power industry is basically stable, and the demand for non-ferrous metals is strong. But on the other hand, the growth rate of non-ferrous metal supply has also accelerated significantly, which has certain impact on the formation of market prices. In addition, the overall average price of non-ferrous metal market fell 0.9% due to adverse factors such as the recovery of the low dollar index this month and the rise of market worries about economic weakness. In terms of coal market, after the national day, the management of coal management ticket was relaxed, the advanced coal production capacity was released quickly, and the upstream production and shipment volume increased. At the same time, the import volume also increased significantly, which led to the increasing supply pressure in the domestic coal market. In terms of demand, the peak of power coal consumption in winter is approaching, the market purchase intention is rising, and the demand has a small increase; however, the overall demand of coking coal is weakened due to the approaching of off-season and the increasingly strict environmental protection. On the whole, the recent coal market is dominated by stable, moderate and weak operation, and the average market price in October slightly decreased by 0.1% compared with the previous month.

In terms of product oil, the international crude oil price in the first ten days of October was affected by Saudi Arabia's unexpected resumption of production; in the middle and last ten days, OPEC's oil producing countries may expand the scale of production reduction, the number of active drilling platforms in the United States and the decline of crude oil inventory and other favorable factors will boost the market price. International oil prices fell first, then rose, and fell slightly overall. The price of refined oil in the domestic market has experienced a reduction, and there is a strong wait-and-see atmosphere in the market. The operating rate of domestic main refineries remained high and the supply continued to rise. Although there are many self driving tours during the national day and the demand for gasoline terminals is well supported, the demand for replenishment after the festival is not good, the demand for gasoline in the middle and late ten days has not improved significantly, and the sales pressure in the main business is large. In terms of diesel, the unit operating rate of outdoor engineering, infrastructure and other terminal oil users has increased, and the demand for logistics and transportation industry is stable, so the demand for diesel is good. In some areas, the autumn harvest and farming are continuous, which also provides sufficient support for the demand for diesel. Overall, the average price of domestic refined oil market in October fell slightly by 0.8%. In the chemical product market, affected by the National Day holiday and stricter environmental protection policies, the factory operation rate is generally low and the supply is tight. The downstream is affected by the peak season factors, and the demand continues to pick up. The improvement of supply and demand structure led to the continued upward trend of domestic chemical product prices, which rose 0.2% month on month in October, 1.0% lower than last month.