The Ups And Downs Of Commodity Prices

Since 2021, affected by multiple factors, mainly international transmission, the prices of some bulk commodities have continued to rise, and the prices of some varieties have reached new highs. On May 23, the BPI of the commodity price index was 1055 points, which was the same as that on May 22. It was 1.31% lower than the highest point of 1069 points on May 13, 2021 during the period (December 1, 2011 to present). The lowest point of 660 points on February 3, 2005 rose 59.85%. However, according to the price monitoring of the business agency, the price of nearly 100 kinds of raw materials in the bulk commodity spot market has declined since May 12. Among them, 44 kinds of products fell more than 3%, and the top 3 commodities were hot-rolled coil (-12.67%), acetone (-10.06%), and n-butanol (-9.11%). According to the analysis of the business agency, from "straight into the sky" to "sudden decline", the sharp turn of the raw material market cannot be separated from the supervision of the relevant departments.

On May 19, the executive meeting of the State Council made arrangements to ensure the supply and price stabilization of bulk commodities and maintain stable economic operations. It required great attention to the adverse effects of rising bulk commodity prices, and focused comprehensive measures in response to market changes in accordance with precise control requirements. Ensure the supply of bulk commodities, curb unreasonable price increases, and strive to prevent transmission to consumer prices.

　　 On May 19, my country’s domestic futures market saw a dive in the night trading, and futures such as black series, chemicals and agricultural products fell collectively. In particular, the black series suffered a heavy setback. As of the close of the night on May 19, coking coal fell 7.98%, iron ore fell 7.92%, thermal coal fell 7.81%, hot rolled coil fell 7.21%, rebar fell 7.07%, Coke fell by 6.45%. Chemicals fell generally, glass fell 6.06%, soda ash fell 5.33%, methanol fell 4.97%, and palm oil fell 4.17%.

　　In fact, the current national regulators are determined to curb the excessive rise of commodities. On May 12, the executive meeting of the State Council made a request to track and analyze the domestic and foreign situation and market changes, and effectively respond to the excessively rapid rise in commodity prices and its associated effects. The business agency believes that the reasons for the decline in the prices of nearly 100 raw materials are related to the imbalance of supply and demand caused by the conflicting high prices of the downstream terminals. It is expected that the bulk commodity market will gradually return to the fundamentals of supply and demand balance, and the growth rate will also decline.