The European Parliament voted overwhelmingly yesterday to pass a motion to freeze the China-EU Investment Agreement. Although this motion will not determine the final fate of the China-EU Investment Agreement, it means that the European Parliament will stop relevant deliberations, which is required for the agreement to enter into force. passing through the middle ring.
It is understood that the motion to freeze the China-EU Investment Agreement accuses China of sanctioning members of the EU Parliament, and therefore will freeze any review and discussion of the China-EU Comprehensive Investment Agreement. The motion requires the European Commission to use the China-EU Investment Agreement to put pressure on China on “human rights” issues. The motion also calls on the EU to “strengthen cooperation with the United States on China.”
Global Times commented that the conditions proposed by the European Parliament for the resumption of review of the China-EU Investment Agreement are crude and arrogant: it requires China to lift sanctions on EU institutions and personnel. The sanctions imposed by China are in response to the EU’s sanctions on Chinese institutions and personnel.
It is absolutely impossible for China to lift those sanctions due to pressure from the European Parliament. The European Parliament stated in the passed motion that the discussion surrounding the China-EU investment agreement should be used as a catalyst for China to “improve human rights.” “protect”, their intention will inevitably be resisted and scorned by China.
Chinese Foreign Ministry Spokesperson Zhao Lijian said earlier that the China-EU Investment Agreement is a balanced, mutually beneficial and win-win agreement. It is not a favor given by one party to the other. It is in line with China and the EU to ratify it as soon as possible. interests, both parties should make active efforts to this end. China’s imposition of sanctions on relevant EU institutions and personnel who have long been maliciously spreading lies and false information related to Xinjiang and seriously damaging China’s sovereignty and interests is the need to safeguard its own interests and is also a necessary, legitimate and just response to the EU’s sanctions and confrontation. It is crystal clear who was the first to cause unreasonable provocation and who was to act in legitimate defense.
Yesterday, Iranian President Rouhani said that agreement had been reached on the main parts of the Iran nuclear deal. The West has agreed to lift major sanctions on Iran, such as oil, petrochemicals, shipping, insurance and the central bank. There are just a few details that need to be ironed out before a final agreement can be reached. Iran also said it would soon export oil from a new port that would allow it to bypass the Strait of Hormuz. Iran’s National Oil Co said it will start shipping crude oil from terminals in the Gulf of Oman next month, bypassing the Strait of Hormuz.
After Iran released a signal about the progress of the Iranian nuclear negotiations, international crude oil futures turned down during the session and have since oscillated downward. U.S. WTI June crude oil futures closed down 2.07%, a new low since April 26; Brent July crude oil futures closed down 2.32%, a new low since April 13 for the main contract.
Last night, the domestic futures market opened at night. Thermal coal and coking coal continued their decline. As of the close at 23:00, the main contract of thermal coal fell by more than 6%, and the main contract of coking coal fell by nearly 6%. 5%, and the main coke contract fell by more than 2%.
After Wednesday’s plunge, cryptocurrencies rebounded across the board, with double-digit gains during the session. Bitcoin once regained $40,000, but after reports that the U.S. Treasury closed Cryptocurrencies collectively fell back following news of tax regulations on cryptocurrencies. Bitcoin once fell nearly $5,000 from its intraday high, giving up most of its intraday gains.
How long will the commodity correction last?
As high-level officials made two consecutive statements to curb the excessive rise in commodity prices, market sentiment has been cooling down this week. The prices of bulk commodities and industrial products, mainly black and non-ferrous, have continued to rise. It pulled back and continued its general downward trend on Thursday. So, how long will this commodity correction last? Will fundamentals once again become the key to leading commodity trends?
In the view of Guosen Futures Research Department, this rapid rise in commodity prices is mainly caused by downstream replenishment. Affected by the epidemic last year, downstream companies generally carried out destocking to maintain low inventory operations. Judging from the official PMI indicator, the PMI raw material inventory index in April 2021 was 48.3, always below the 50th percentile. The new orders and new export orders indexes have remained above 50 since March.
“This means that after the recovery of exports and consumption this year, in addition to the increased demand for commodities brought by production, raw materials also need to be replenished urgently, and downstream people are worried about the continued rise in raw materials. Especially After April, companies’ demand for hedging surged. Generally speaking, downstream replenishment will not be completed soon. With the recent announcements from senior management and commodity prices starting to fall, these downstream companies will also buy at low prices again. “Therefore, they believe that this round of commodity price correction will not last too long, nor will it fall below production costs.
Looking specifically at the black sector, in the view of Zhuo Guiqiu, an analyst at Jinrui Futures, the sharp price correction of black commodities in this round is not only due to macro-control factors, but also mainly due to high prices. dampened demand. She believes that the main contradiction in current fundamentals is that demand is suppressed by high prices and difficult to release. This can be seen from the low daily trading volume of building materials. Next, it is necessary to observe the acceptance of prices by the demand side. Prices may still bear the burden before demand is released. pressure adjustment.
The black building materials group of Huatai Futures Research Institute stated that in the future, black varieties will linger among policies and fundamentals. On the one hand, the recent intensive propaganda from high-level officials cannot be ignored, and on the other hand, the basic varieties No fundamental change has occurred. In terms of varieties, they believe that in the current black plate, the fundamentals of steel are still relatively healthy, but the cokeThe speculation on raw materials has converged in the short term, and the short-term raw material price increase has accumulated a huge increase. In the environment of increased volatility in the bulk raw material market and greater flexibility in policy implementation, copper prices need to digest the increase in the short term, and the medium and long-term trend is still strong. From the fundamentals of copper, we can see that South America, as the largest copper mining area, has been plagued by the epidemic, and global inventories are at historically low levels. The subsequent accumulation of inventories will be slow or will be depleted again. At the same time, carbon neutrality, new energy, and new infrastructure belts There is huge potential for copper consumption, and the overall fundamentals are still performing well.
Gong Ming, analyst at Jinrui Futures, said that due to the high degree of internationalization of copper product pricing, domestic pricing power is relatively limited, and copper import dependence is high, the policy level wants to change The supply and demand relationship of copper is difficult, and its impact on prices is relatively limited over a long period of time. At the same time, the current fundamentals of copper have certain support for prices. As overseas economic recovery is still on the way, overseas consumption growth is expected to be strong. Although domestic consumption has been significantly suppressed by prices, industrial inventory levels are not high, domestic consumption is still resilient, supply-side disturbances are still present, and TC is at a low level.
The non-ferrous metal team of Orient Securities Derivatives Research Institute believes that due to the current inflection point of macro factors that is difficult to confirm, inflation expectations and the weak US dollar will still support copper prices. From a fundamental point of view, it is difficult for the National Standing Committee to change expectations that the overseas supply and demand margin will continue to improve. However, in the domestic stage, the suppression of price increases by accumulating reserves may receive more attention as speculative sentiment cools down. In the short term, we need to pay attention to the sentiment of domestic downstream replenishment after this round of price correction. If downstream replenishment occurs intensively, there may be short-term destocking in the country. Disturbances in the supply of overseas mines and scrap copper also need to be observed, and the risk premium has bottom support for copper.
“At present, the Standing Committee of the State Council requires a crackdown on speculation, and the cessation of speculation has caused prices to return to relative rationality. The pricing weight of future macro expectations and fundamental margins has increased. Copper prices have not yet turned, but this round The depth of the price correction is relatively deep.” Strategically, they suggest waiting for speculative sentiment to return to a relatively rational state before adopting a bargain hunting strategy. Downstream terminal companies can use this correction to carry out buying hedging in stages and reasonably avoid raw materials. Price Rise Risk.
In terms of aluminum, the team said that as prices continue to correct recently, downstream willingness to receive goods has rebounded, and the consumer side has performed well, whether from electrolytic aluminum plants or aluminum processing plants. Judging from the feedback, downstream orders performed well, and the overall order situation was comparable to the peak season in previous years. However, there are new variables on the supply side. In Yunnan, due to the west-to-east power transmission coupled with insufficient power generation during dry periods, power consuming companies in the province have experienced peak-shifting power rationing. Although the short-term production reduction is limited, Yunnan will be the main area for new investment in China after June, so power problems may have a greater impact on the pace of supply release in the medium term. At the same time, in line with the situation that electrolytic aluminum companies in other domestic provinces have reduced production and delayed new investment, the overall supply growth rate is lower than market expectations, which may delay the accumulation cycle of domestic aluminum ingots.
“It should also be noted that the National Council’s renewed mention of the issue of stockpiling is a major risk point for aluminum prices in the near future. According to our current knowledge, the number of stockpiles is about 30- Between 500,000 tons, it is expected to appear from the end of May to June. Although the news of the dumping of reserves has been digested by the market for a long time, once the news comes to light, it is still expected to put great pressure on the market, so this should be fully considered during the transaction process. Risky point,” they warned. </p
