During the domestic market's Spring Festival closure, the prices of major raw materials in the international market continued to rise, with the CRB index, which tracks the performance of a basket of commodity prices, increasing by nearly 2%. With prices hitting new highs, the industry generally expects that the possibility of a "crazy" increase in raw material commodity prices in the Year of the Dog is not high.
During the Spring Festival holiday, the international commodity market continued to trade. Statistics show that major raw material commodities including crude oil and copper futures all rose during the holiday, driving the composite price index CRB to surge by 1.4% on the 14th. After setting the largest single-day increase in nearly two months, it continued to rise slightly, almost fully recovering the market's losses in the week before the holiday.
Among them, international oil prices gradually rebounded after a sharp decline in the early stage. The oil price in the New York market not only held firm above the $60 per barrel mark, but also continued to rise, bringing the oil price back above $62 per barrel. Another benchmark oil price, the London Brent oil price, returned to around $65 per barrel, basically recovering about half of the decline during the market's sharp drop in early February.
Another closely watched raw material, "Copper Doctor", is approaching the three-year high it set earlier. The trading range of copper futures in the London market has returned to around $7,200 per ton.
After the domestic market reopens after the festival, some raw materials may catch up in price, but the increase may not be significant. Sun Yonggang, an analyst from Chaos Tiancheng Futures, believes that although the performance of raw material commodities has frequently exceeded expectations in the past two years, with prices hitting previous highs, the possibility of a "crazy" rally is not high.
After the bottoming out and rebound in 2016 and the continuous rise in 2017, the prices of most bulk commodities are no longer cheap at present. In the international market, the CRB index has basically returned to the level at the end of 2015, rising by more than 20% compared with the low point set in February 2016.
Raw material prices in the domestic market have risen even more significantly. Before the start of this round of increase, the low point of the Wenhua Commodity Index, which comprehensively reflects the performance of domestic commodity futures prices, was 106.4 points in November 2015. Currently, this commodity index is basically close to 160 points, with an increase of more than 50% compared to the low point two years ago.
Most raw material commodities with significant gains have reached new highs, especially in the "black series" such as steel and coal. The futures price of rebar has returned to the high point of February 2013. If the spot market is referred to, the previous spot market quote of over 5,000 yuan per ton is close to the historical high point of 2011.
During the off-season for consumption, steel prices remain at a high level, and the favorable expectations after the festival are an important supporting factor. Qiu Yuecheng, a senior researcher at Xiben New Expressway, believes that due to factors such as production restrictions and steel plant maintenance, the supply of steel has been affected to some extent. Meanwhile, the favorable outlook for the future market, the demand for "winter storage", and rumors that production restrictions might be extended have further exacerbated the tight market situation.
Industry analysts believe that the post-holiday market remains to be observed. On the one hand, the recovery speed of steel supply depends on further clarification of policies. On the other hand, there is also uncertainty as to whether market demand, especially exports, will be affected by factors such as trade frictions.
For crude oil, the "top commodity" with market benchmark significance, the market generally expects stability to be the "main theme". Crude oil prices are likely to keep rising in 2018, but the upward trend will be significantly weaker than that of the previous year. The China Petroleum and Chemical Industry Federation predicts that with economic growth, the demand for crude oil will continue to grow at a low speed, and the supply and demand will remain in a relatively loose state.