Yesterday, the domestic commodity markets rose across the board, black futures continue to lead, leading iron ore rose to three year high, coke rose nearly 5%. Nonferrous Metals strong rise, copper surged more than 5%, hit a new high stage. Chemical collective also rose, the asphalt rubber, hitting the daily limit, followed by the rise of methanol.

“2017 was the year of goods.” Industry analysts said that the supply side structural reform from the black line will be gradually extended to the field of non-ferrous metals and agricultural products, “The Belt and Road” and the expansion of the United States and India capital construction scale will enhance the commodity demand space. Commodities in 2017 is still brisk performance of investment products.

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Yesterday, the iron ore futures 1705 contract to maintain the trend of rising turbulence, hit a new high stage, rose to more than three year highs, closing at 712.5 yuan / ton, up 6.74%. Steel, coil were up more than 4%. Mandarin financial analysts believe that although the demand has not yet started after the Spring Festival, last week Yitie ore led by “black” larger fluctuation of funds to buy low enthusiasm. At present, although the social stock rose sharply, but the steel in the inventory and the financial pressure is not too big, so very price will strongly mills. From this year, around the steel to capacity and will accelerate the improvement of medium frequency furnace, supply release still constraints. The spot construction steel market ushered in the first year after the shock, mainly fell after the first rise, mainly due to the spot futures fell sharply, high inventory and other factors lead to fall, then the steel enterprises to increase the market maintenance support.

At the same time, foreign copper strike led non-ferrous metal copper fermentation. The main copper contract 1704 morning broke through the pre shock interval, rose to 50000 yuan / ton above the mark, the price rose to another new high stage, more than a two-year high, closed at 50120 yuan / ton, up 5.36%, 1702 contracts, 1710 contract hit a limit. Shanghai, Shanghai zinc and nickel rose more than 3%.

There is news that the temperature is getting warmer, the copper market will usher in the peak season demand, two of the world’s largest copper mine production was blocked, copper stocks continued to decline, the rise in copper prices rose, copper rose to more than 4.6% on Friday, a 20 month high of $6090 / ton, Asia time yesterday soared again more than electronic disk 1%, the maximum rose to $6204 per ton.

Analysts said that despite the rise of the direct fuse copper is the largest copper production stagnation to supply short-term tightening, but from the beginning of the trend, the supply and demand side warming and macro jollier is the root cause of the long full of confidence.

In addition, in December 19th last year hit a two month high of 345475 tons, copper stocks continued to decline. As of Friday, since this year the cumulative reduction of 23%, the demand for off-season inventory falling instead of rising to the Bulls greatly encouraged, and the two countries data even more investors hope for the upcoming season demand.

“After BHP announced the world’s largest copper mine in Chile’s Escondida copper strikes as force majeure to disrupt production. The problem of the world’s second largest copper export license of Grasberg project is still uncertain.” Analysts interviewed said that trade data China better than expected boost metal prices. In addition, Trump had released the next two or three weeks will launch the signal of large-scale tax reform, also led the market higher. Multiple positive resonance of metal support climbing.

after the Spring Festival holiday, the domestic commodity market a Chunyiangran, agricultural products, such as ferrous metals generally rebounded, but the plastic was weak, led by variety became the main reason is that during the Spring Festival, the supply pressure increases sharply, inventory accumulation, poor downstream demand.

In February, the plastics market or the continuation of weak trend, but later with the maintenance season, demand is expected to improve, gradually digest inventory pressure, plastic fundamentals are expected to achieve from the “no” to the “Thai” transformation, prices are expected to rebound.

After March the supply pressure will be significantly reduced

Before the Spring Festival, the domestic polyethylene plant maintenance enterprises involved less PE equipment maintenance rate temporarily stabilized to 1.8%, mainly in the temporary parking. The polyethylene industry operating rate of more than 98% in the market supply pressure is not reduced, this is one of the reasons for weak plastic prices. But after March, with the arrival of the polyethylene market maintenance season, the overall supply will relieve the pressure. 2017 polyethylene plant maintenance mainly concentrated in 3 – June, enterprise maintenance plan is relatively more. The maintenance plan has to include Shaanxi Yulin 300 thousand tons of LLDPE plant, Qilu Petrochemical 650 thousand tons of production capacity, the density of Yangzi Petrochemical 500 thousand tons of linear and high pressure, Fushun Petrochemical 940 thousand tons full density.

The new capacity put in the first half of this year, domestic polyethylene invest in new capacity is not much, only the April transit co-founder of a set of 370 thousand tons of high pressure device plans to put, even if the new capacity put into production on schedule, but some hedge maintenance capacity, there is no real impact on the total supply. In fact, the new launch capacity remains uncertain, the past three years of domestic polyethylene in the first half of both no actual capacity put, put some plans during the first half of the second half of the production capacity is often delayed until delivery. Therefore, although the current market supply pressure polyethylene, but after March the supply pressure will be significantly reduced.

The Lantern Festival will gradually rise from the low demand

Affected by the Spring Festival, LLDPE downstream operating rate dropped significantly, the recent film started in the rate of 50%, lower than the same period last year 55%; agricultural operating rate is about 50%, also lower than the same period last year the level of 55%. Just downstream from LLDPE, the seasonal demand characteristics, general demand is February trough, March is the peak of demand, mainly due to the Spring Festival and the Lantern Festival effect, from the low demand will gradually rise, the demand is expected to improve in just a matter of time.

From the disk, because the current demand in the doldrums, plastic spot and futures prices are weak, North China recent spot price has dropped to 10000 yuan / ton, but the price drop but is conducive to traders and downstream enterprises to actively promote material delivery, demand.

Sinopec is expected to gradually digest inventory pressure

Last week, the domestic supplier of butadiene prices continue to rise, the price of Sinopec for weeks the cumulative increase of 1500 to 23000/23100 yuan / ton; as of 13, the business community monitoring domestic butadiene ex factory price of 23441 yuan / ton, up 8.88% for the week.

Weeks inventory is low for the price of butadiene support greatly increased the outside strength boost confidence in the domestic market, so the Spring Festival approaching, part of the downstream plant because of the current high costs ahead of holiday, demand reduction, light trading.

Shandong Weite chemical (Wan Da) 6-7 KTPA butadiene device in low load operation, no export. Operation of Liaotong chemical 120 thousand tons / year butadiene plant stable pipeline dynasol device, a small amount of export.

The recent low inventory industry offer strong support and support, there is no lack of good has obvious boost to butadiene market; current market transactions Guadan, but downward price is limited, the domestic market next week is expected to continue strong finishing operation of butadiene.

During the Spring Festival holiday, the dollar index adjustment is large, the outer most commodity prices, the industry is expected, the domestic commodity futures on the first day should have good compensatory growth, non-ferrous metal prices are expected to outstanding performance. With the global PMI (PMI) index continued to rise, the raw material replenishment cycle is becoming an important driving force to promote the rise in commodity prices.

January PMI data released by the National Bureau of statistics for 51.3, hit a 5 year high, a continuation of the steady expansion trend.

However, the purchase price and the prices are down the first major raw materials, especially steel prices decline significantly. At the same time, the euro zone January manufacturing PMI final value of the data is 55.2, at the highest level in nearly 6 years. And the United States in January ISM (manufacturing index) was 56, also hit a 2 year high.

Why investors are particularly concerned about the recent PMI and ISM manufacturing data?

Research shows that China PMI inventory data, the inventory cycle and domestic copper, rubber (20105, -895.00, -4.26%) and other industrial varieties high degree of correlation. Especially in the current manufacturing industry is the pillar industry of Chinese, raw materials inventory changes impact on prices is more obvious. Once the enterprise initiative restocking end, commodity price trend will have significant change. According to historical experience, the average replenishment cycle lasts for one year to a year and a half, the market generally expected the replenishment cycle will continue until the middle of 2017.

“The actual stock compensation is still in progress.” CRE securities bond analyst Li Junjiang said that the current inventory of industrial enterprises in the downstream inventory, the restocking initiative began in the downstream industry, and with the stock up continuously, the downstream industry sales ratio gradually close to normal level, while the middle reaches of the industry sales ratio growth still continued to be negative, at the same time all industrial enterprises lower sales the absolute value of the ratio, and the year-on-year growth rate continued to be negative since the beginning of 2016, the year-on-year decline was narrowed significantly, so the restocking initiative still has persistent.

However, for restocking will continue to lead to a rise in commodity prices this year is still controversial issues in the market. However, most analysts said a quarter inflation peaked, commodity prices have peaked. Shun Securities chief economist Gao Shanwen said earlier, despite the apparent rebound in commodity futures prices in January. However, from the field of circulation, continuous two years of negative growth in the important production material price index, PPI (producer price index) chain growth continued to gain momentum is fading. In this way, commodity prices will continue to rise. But once the economic downward pressure on demand confirmation, disturbance of speculative funds may make the fluctuation of commodity futures market increased.

Haitong Securities chief economist Jiang Chao said in the short term, the Spring Festival factors and early commodity prices inflation is still pressure, taking into account the exchange rate stabilization and control of asset bubbles, prevent financial risks and other factors, prudent monetary policy will remain neutral. But as commodity prices fell, the spring festival gradually faded, high inflation is the top of the building.

“We judge a quarter inflation peaked, then in real estate and stock cycle both fell, the economy will bottom two.” Founder Securities chief economist Ren Zeping said on January PMI data, with the real estate cycle peaked, PMI large enterprises began to fall, although the replenishment cycle economy to continue to promote, but after entering the two quarter, the economy will end enterprises replenishment, down again.

Since June 10th, similar negotiations between China and the EU has conducted two rounds, the two sides can not reach a solution if before August 6th, anti-dumping tax from the current 11.8% to 47.6%.

Ass sun (NASDAQ:CSIQ) global market senior director said that the EU for the price of the bottom line, it is difficult to accept, “0.57 euro / component price bottom line Watt, will let China company product no competitiveness in europe”.

“We had commissioned the European team on the price to do a survey, the customer said, more than 0.57 euros / watt will not buy China components.” Zhang Hanbing also told reporters that the investigation also showed that if the component is priced at 0.52 euros / watt, European business will slide 10%, if it is 0.53 euro / watt then lost in 40%, 0.57 euros / watt will 100% blocked on the European market outside.

In addition, several solar companies who told reporters, in the price negotiations, some terms have reached a consensus, but is still part of fuzzy processing.

Such as the second round of talks will be the first round of the “guilt clause, the first round for an enterprise sell all enterprises to go unpunished; the second round of negotiations and set the price of PV floating period, 0.57 euros / W is not constant, but by the Bloomberg database in the component in price as the floating datum.

“But the Bloomberg system in relatively high prices.” Zhang Hanbing said, Bloomberg is the user registration, fill in the price collection “relatively free, does not represent the real market price”.

As Bloomberg data as the third party reference standard of the author, She Haifeng believes that the need for third party data as a floating reference, while the Bloomberg database third sold in the EU although the price is not very perfect, but for the third party data sources, relatively fair, “so you can keep the death of 0.57 euros / watt the bottom line price”.

In fuzzy terms, the EU once China accept the terms, a company can only be limited to the export of components, and can not be exported batteries, inverters and other products; it also can set up factories to third party.

“We want to explain the terms, such as our company has set up factories in Canada, this is not the third party?” Zhang Hanbing said, if you do not recognize the enterprises to set up factories in early third, the EU agreed to the terms of the bottom line price then has no meaning.