Strong US dollar depresses chemical commodity slump

wallpapers Industry 2020-12-09

because of strong U.S. data, boosting the Fed's expectation of raising interest rates this year. On May 27, the US dollar index rose 1.31%, global commodities plummeted, Lungshan copper hit a three-week low, oil prices fell nearly 3%, gold prices fell nearly 2%, Chicago soybean futures fell for five consecutive days.

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were dragged down by this. The domestic commodity market was generally weak yesterday, and the basic metals were collectively sold off. Shanghai copper fell to the low level of nearly four weeks, chemicals returned to a weak position, and precious metals both fell. The

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dollar index hit a three-month low of 93.133 on May 15. After disappointing manufacturing and consumer confidence data in the United States in April, Federal Reserve Chairman Yellen expected the Federal Reserve to raise interest rates this year, which accelerated the rise of the dollar. After the U.S. financial market reopened on Tuesday, the United States released a series of important data, including durable orders. The US dollar rose more than 1% against a basket of major currencies on Tuesday, expanding the recent increase, boosting the expectations of the Federal Reserve Board to raise interest rates this year. The return of the US dollar king again led to the collapse of commodities.

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however, in Asian electronic trading on Tuesday, the dollar index rose slightly, and most commodities recovered slightly. As of 19:30 Beijing time on May 27, LME copper rose 0.06% to 6110 US dollars / ton, New York crude oil rose 0.26 US dollars to 59.28 US dollars / barrel, while international gold prices continued to fall by 1.4 US dollars to 1186.6 US dollars / ounce.

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in the strong US dollar and the general decline in the external double pressure, yesterday's domestic commodity futures market again plummeted. Among them, Shanghai copper's main contract opened low and went low in the night, reaching a nearly four week low of 44140 yuan, and closed at 44420 yuan / ton, a drop of 1%. The trading center of Shanghai tin continued to move down, and as of the closing, it recorded a 1.94% drop to close at 116560 yuan / ton. Shanghai nickel, Shanghai aluminum and Shanghai lead also fell. Due to the fall in oil prices, chemical products were all green, plastics fell 1.41%, PP opened significantly lower at 8295 yuan, and has been weak since then, closing down 1.34% to 8343 yuan / ton.

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international investment banks continue to empty the interpretation of

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for the future market of bulk commodities, and international investment banks have called out empty. Goldman Sachs, for example, said recently that a sharp rebound in iron ore prices would provide an ideal short opportunity. Sooner or later, iron ore market fundamentals will bring prices back down to $52 / Mt.

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while Citigroup, another investment bank, sharply lowered its long-term iron ore price forecast due to the slowdown in China's demand. Dalian iron ore futures fell after rising to a two-week high. The September contract of Dalian iron ore futures fell 0.6% to 432.50 yuan / ton yesterday, after rising 4% or hitting the limit on Tuesday. Iron ore prices of

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have risen recently, with the decline of imported iron ore stocks at Chinese ports and the tight supply of imported ships, the spot iron ore prices have risen to above US $60 per ton.

but Kelly Teoh, derivatives analyst at Clarksons platou futures in Singapore, said, "the market thinks the recent rise in iron ore prices is short-lived because the fundamentals of the market have not changed."

Goldman Sachs analysts said the target price of iron ore for the year was $52 - the fundamental situation did not change, which means that the current rebound will bring an ideal "short window". Goldman Sachs believes that the structural situation that has led to the sharp fall in iron ore prices since mid-2014 has not changed, and supply is still greater than demand. Companies with higher production costs will eventually be forced to shut down.

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at present, analysts have great differences on iron ore price trend. Barclays expects an average iron ore price of $56 per ton in 2015, which UBS thinks is $50. Citigroup, on the other hand, expects an average price of only $37 in the second half of the year, and will only rise to about $40 in 2019.

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in 2011, the international iron ore price rose to a record high of US $191.7, and then fell into the water crazily. Iron ore prices fell 47% this year due to oversupply. However, iron ore rebounded strongly after BHP Billiton announced in late April that it would postpone its capacity expansion plan in 2017. After bottoming at $47 in early April, iron ore prices have rebounded above $61.

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in addition to iron ore, Citigroup also lowered its price estimates of steam coal and coking coal. Both steam and coking coal prices are currently below long-term sustainable prices, but Citigroup expects prices to be less likely to recover near the highs reached a few years ago, the agency said.

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Citigroup lowered its long-term price forecast of steam coal from US $90 to US $80 per ton, and the price forecast of coking coal from US $170 to US $125 per ton.

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as for the reasons for the reduction, the agency said, the first is the decline in production costs. They expect that the long-term prices of steam coal and coking coal will depend on the sustainable costs of current mining. The second is the structural decline in demand. Citigroup said China's demand for steam coal has reached its peak, and China's economic growth is slowing down and is in the transition stage.

commodities or continue to bear pressure,

"long dollar time." Goldman Sachs said in early May that the decline in the dollar would not continue and investors should take the opportunity to buy as the US economy will rebound strongly.

"if the U.S. dollar index rises from 90-100 points to more than 120 points, oil prices are likely to fall below $50." The head of a large fund said.

in recent weeks, analysts and traders in the crude oil market have said that the foreign exchange market appears to be affecting oil prices. Oil market investors are paying more attention to the foreign exchange market than at any time since the European financial crisis.

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about two weeks ago, Morgan Stanley analysts said there was an "extraordinary" link between the dollar index and Brent crude oil futures. The negative correlation between them is the most close in three years. The consensus among these institutions is that if the Federal Reserve raises interest rates as expected later this year, the dollar may rise further, which will further depress crude oil and commodities.

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