Who knocked on the door of bear market after avalanche of commodity market

wallpapers Industry 2020-12-09
The history of

has always been surprisingly similar, and the commodity market has recently returned to its lowest level since the outbreak of the financial crisis in 2008.

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crude oil of NYMEX hovered around $42 yesterday, falling rapidly from $147 to $47 in early 2009 after the outbreak of the financial crisis. In addition, LME copper, LME aluminum and LME zinc all broke new lows since 2008. What factors knock on the door of the bear market in the commodity market?

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in this regard, industry insiders pointed out that this is mainly due to the recent global economic downturn and insufficient demand. At the same time, taking the opportunity of the Fed's interest rate increase expectation, the global capital began to tighten, which is also the catalyst for the decline of commodities.

this bear market cycle is longer? According to the data of

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on August 19, the lowest price of NYMEX crude oil was US $41.35, a new low of 10 years; the lowest price of IPE oil distribution was US $48.24, a new low of six and a half years; the lowest price of spot gold was US $1072.93, a new low of six years; LME copper, LME aluminum and LME zinc were at the lowest of 4983 US dollars, 1549.50 US dollars and 1730 US dollars, respectively, breaking new low since 2008.

Cheng Xiaoyong, assistant director of the

Baocheng futures financial research institute, said that compared with the previous financial crisis, the collapse of the commodity market has four characteristics. First, the current oil surplus is due to the sharp increase in supply brought about by the shale oil technological revolution, while the supply pressure in 2008 was reflected after the financial crisis; second, there was no financial crisis at present There is no systemic risk shock wave in the financial market. "Third, geopolitical game, OPEC, the United States and Russia are fighting hand in hand to compete for market share; fourth, China's economy is in a downward trend, and China's economy was only temporarily impacted by external shocks during the financial crisis in 2008." Cheng Xiaoyong said. Xiao Lei, a senior researcher at

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, said that, for example, the sharp fall in oil prices in 2008 was due to speculative short selling by many investors, including investment banks, in the crude oil market, in addition to the impact of the US subprime mortgage crisis. However, the decline in oil prices since July last year is mainly due to the weak real demand, the increase in shale oil production and the strengthening of the US dollar. On the whole, it is the result of a comprehensive effect of many aspects, not the result of speculative short selling. According to the data, the economies of emerging economies have shown a downward trend in recent years. The GDP growth rate has declined from 6.5% in 2008 to 4.7% in 2014, and the forecast value of this year even drops to 4.3%.

the industry insiders pointed out that at present, the global economy is in a weak state, especially in emerging market countries with large demand for bulk commodities, which has led to a serious decline in demand and lack of impetus to support commodity prices. This is a long-term impact and may last longer than the short-term impact of the 2008 financial crisis. In China, for example, demand for commodities has fallen. According to the latest statistics of the General Administration of customs, in July 2015, China's import and export amounted to 2.12 trillion yuan, a decrease of 8.8% over the same period (the same below). Among them, export was 1.19 trillion yuan, down 8.9%; import was 0.93 trillion yuan, down 8.6%; surplus was 263 billion yuan, down 10%.

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strong US dollar is a necessary condition for the prosperity of

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commodity market, which is also a necessary condition for the prosperity of the global market. With the enhancement of the Fed's expectation of interest rate hike, on the one hand, it leads to the emergence of a strong dollar cycle, on the other hand, it causes the fear of global capital tightening trend, so the commodity prices fall down a thousand li. The Federal Open Market Committee (FOMC) has made up its mind on the next step, so it expects the Federal Reserve to raise interest rates in September, the bank said on Tuesday. Yuan Tao, a precious metal analyst with

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, told the first financial daily: "it is impossible for the Federal Reserve to raise interest rates again when the inflation rate is 2%, because in the environment of low inflation, this will be far away and aggravate the risk of inflation overshoot. If the interest rate is raised too late, the interest rate will rise sharply at that time, which will cause great market turbulence and increase the cost of the Fed's interest rate increase, which is what the Federal Reserve does not want to see. " Affected by the news, the highest dollar index broke through 98, the latest 96.9347, down 0.0697, or 0.07%. So far this year, the dollar index has risen more than 7%.

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are worth noting that the strong US dollar has "hit" other countries' currencies, which also puts pressure on the commodity market. Foreign media reports pointed out that Canada and Russia's oil producers are among the world's top producers. They sell crude oil in U.S. dollars, while operating costs are paid in local currency. Since August, the exchange rate of the Canadian dollar against the US dollar has reached an 11 year low, and the exchange rate of the Russian Ruble against the US dollar is close to the lowest in six months. This has helped the world's second and fourth largest oil producers to reduce production costs.

"the decline of oil, gold and copper has seriously affected the local currency exchange rate of producers of these commodities. The more their currencies fall against the US dollar, the lower their costs. This will put further downward pressure on commodities, creating a vicious circle. " Said Mike Wittner, head of oil market research at Societe Generale. Is

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and the theory of "bargain hunting oil companies" reliable?

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under these circumstances, is it feasible for "bargain hunting oil companies" to be rampant for a time? According to the reporter's understanding from various sources, no matter from the supply side, demand side, international macro policy, the oil price seems to have no support for a rebound in the short term. More analysts said that the mid year rebound may be a flash in the pan, the market for the "bottom rebound" expectations are too high.

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from the supply side, crude oil analyst Jin Xiao of Dongzheng futures analyzed to our reporter: "the original market expected that the US may reduce production in the third quarter, but the expectation did not materialize. The organization of Petroleum Exporting Countries (OPEC) production is continuing, and the United States is determined to maintain market share in the same way as OPEC. " In addition, the U.S. oil well shut-down and restart costs are high. Due to the high sunk cost (i.e. construction cost) in the early stage, as long as the oil production can continue, no matter whether the oil price is lower or not, this can still make up for part of the sunk cost.

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