Good morning, let’s take a look at the important news first.
The latest statement of the "three hands" of the Federal Reserve
On Thursday, new york Fed President Williams, who is known as the "third-in-command" of the Federal Reserve and enjoys the permanent voting right of FOMC, gave a speech, warning that if the data shows that the Fed needs to raise interest rates to achieve its goal, then it will.
However, Williams stressed that the above-mentioned "interest rate hike" is not his expected baseline situation. He reiterated that the Fed’s monetary policy is in a good position, and said that he did not feel the urgency of cutting interest rates, even though it was going to cut interest rates eventually. Economic data will determine the timing of interest rate cuts.
In addition, early this morning, Federal Reserve Bostic said that he was satisfied with keeping interest rates stable, and reiterated that it was not appropriate to reduce borrowing costs before the end of the year. Bostic said that he still believes that inflation is moving towards the central bank’s 2% target, but he pointed out that this road may be slower than people expected. He had previously said that he expected the Fed to cut interest rates only once this year.
Federal Reserve Kashkali said that the Fed may postpone interest rate cuts until after 2024. When asked whether it is appropriate to keep interest rates unchanged this year in view of the recent unexpected increase in inflation data, Kashkali said "it is possible".
According to the Reuters survey, 54 out of 100 analysts believe that the Fed will cut interest rates for the first time in September (the survey in March was in June); Of the 100 economists, 50 think that the Fed will cut interest rates by 50 basis points in 2024, 34 say that the rate will drop by more than 50 basis points, and four think that it will not cut interest rates.
Nick Timiraos, the "New Federal Reserve News Agency", pointed out earlier that Powell hinted that if inflation continues to be higher than 2%, interest rates may be kept at a high level for a longer period of time, which means that if inflation is slightly higher than expected, it is unlikely to raise interest rates.
The futures prices of soda ash and glass both rose sharply. What happened?
On Thursday, the futures prices of glass and soda ash rose sharply. The main contract of soda ash SA2409 rose by 174 yuan/ton to 2070 yuan/ton, an increase of 9.18%. The main glass contract FG2409 rose by 54 yuan/ton to 1512 yuan/ton, with an increase of 3.70%. Futures Daily reporter also observed that the recent soda ash futures price performance is particularly strong, with the bottom rebound rate of nearly 20%, and the futures price on Thursday hit a new high of nearly four months. Relatively speaking, the glass trend is weaker than soda ash, and the bottom rebound rate is about 7%. What is the driving force behind the sudden strength of the two varieties?
In fact, for yesterday’s joint surge in the futures prices of soda ash and glass, the industry insiders called the rise of the two varieties far beyond market expectations.
"The recent rebound in the price of soda ash is mainly driven by supply reduction and expected improvement." Hu Peng, a senior analyst of CITIC Jiantou Futures Energy, said that since April, the soda overhaul plan has increased, the output has dropped at a high level, and the supply side has supported the price.
Longzhong information data shows that the output of soda ash in Zhou Du in the past three weeks is about 700,000 tons, which is over 5% lower than the 730,000-750,000 tons in March.
Previously, soda ash has been in a small surplus state, and the recent increase in maintenance and decrease in imports have significantly eased the oversupply. In April, Yuanxing Energy, Shandong Haitian and other enterprises were overhauled. In May, Shandong Haihua, Jiangsu Shilian and other enterprises had overhaul arrangements, and the market expected output declined. Recently, the import of soda ash has decreased significantly. At present, the inventory of soda ash of about 900,000 tons is at a slightly higher level of neutrality, and the expectation of inventory accumulation in the near future is not strong, and the inventory pressure is not great.
In addition, the number of photovoltaic glass ignition production lines was large in early April, and the macro expectations improved recently. The expected landing of special bonds boosted market sentiment. Driven by many factors, the price of soda ash futures rose sharply.
"From the spot market, the domestic soda ash market was sideways in the first half of the week, and the market trading atmosphere was tepid. Most soda ash manufacturers had sufficient orders, and the previous orders were mainly executed, and the new orders were generally signed." Wei Chaoming, an analyst of Founder’s mid-term futures, believes that there are two key driving factors for the rise of soda ash. One is that the inventory of soda ash enterprises has stopped accumulating in the past two weeks, and the other is that the market has renewed doubts about Yuanxing’s energy and water consumption indicators. "He said.
Comparatively speaking, the glass futures price rose sharply, on the one hand, driven by the rising price of soda ash at the cost end, and on the other hand, influenced by the expected improvement of the market. Last week, the glass futures price rebounded and fell back, and the wait-and-see mood revived after the middle and lower reaches replenished the stock.
"The news about the special debt after the close of trading on Wednesday boosted the market sentiment, and the black system was running strongly as a whole. The glass inventory data released on Thursday showed that the glass inventory decreased by 59,000 tons to 2.96 million tons this week, continuing the trend of going to the warehouse last week and driving the glass futures price." Hu Peng said.
In this regard, Fan Ajiao, an analyst of Hongye Futures, also believes that the glass fundamentals are weaker than soda ash. Yesterday, it showed a lightening and rising, which was in line with the pace of the black system. The recent glass market mainly rebounded with the macro warming and the rebound of the black system. In addition, as coal prices and soda ash prices bottomed out, cost support rose.
"From the perspective of glass’s own fundamentals, production and sales are still weak in recent days, spot prices are also weakening, high supply and superimposed demand are shrinking periodically, and industrial pressure is still relatively high." Fan Ajiao said that the fundamentals of soda ash are far better than glass, and at this stage it is a situation of strong supply and demand, mainly because the demand for heavy alkali downstream is very good.
According to her introduction, at present, the production lines of float glass and photovoltaic glass continue to ignite, and the total daily melting capacity has reached a record high of 280,000 tons. This year, 38 new ignition lines are planned for photovoltaic glass, and the daily melting increment is more than 40,000 tons. The daily melting capacity of float glass is maintained at a high level of 175,000 tons, and the production of float glass is rigid. Under the condition of acceptable profit, centralized cold repair may be difficult to see in the short term. "In the case of such strong demand, when the supply side has greater flexibility, the price will show great fluctuations." Fan Ajiao said that although the staged supply loss does not change the overall oversupply pattern of the balance sheet, it will indeed disturb the short-term market.
The reporter learned that Yuanxing Alashan, an influential supplier of soda ash in the short term, has reduced production and reduced its daily output by 3,000 tons. The potential interference factors such as equipment problems and water indicators in Yuanxing have always been concerned.
"From the perspective of soda supply, the weekly output was close to 750,000 tons when the output was high this year, and the lowest point in the first quarter was around 660,000 tons. Last week, the loss was large, and the weekly output fell back to around 700,000 tons." Fan Ajiao said that from the dynamic balance table, it can be found that when Zhou Du’s output returns to the range of 690,000-700,000 tons, the problem of oversupply will no longer be obvious, and the pressure of accumulated stocks will be obviously alleviated. Judging from the seasonality of soda production, it is far from the maintenance season at present. Usually, the output supply will drop significantly during the summer maintenance from June to August. In her view, if the short-term supply loss due to failure returns, the disturbance of the supply side will be difficult to become a trend this month.
Short-term or reappearing differentiation trend of two varieties
From the transaction logic of the two varieties, some changes have taken place compared with before.
"Recently, the trading logic of soda ash futures has shifted from oversupply to summer overhaul, and the key factors leading the trend of soda ash in the future are the scale and duration of upstream overhaul, the progress of downstream imported soda ash and the rhythm of replenishment." Hu Peng said that if the maintenance lasts for a long time and the output of soda ash remains at the current level, the price of soda ash will still be strong; Anyway, if the maintenance is not as expected or the downstream imports are increased and the purchase amount of soda ash is reduced, the price of soda ash will face the pressure of callback.
The trading logic of glass futures is still fundamental for the time being, and the reality and expectation of oversupply are difficult to change. "The breaking point of the glass market in the later period is that the upstream enterprises actively carry out cold repairs and the policy side exceeds expectations to boost demand." Hu Peng said that at present, there is still an average profit of more than 200 yuan/ton at the spot end of glass, and the probability of actively repairing the production line is not great. The policy end has not changed much temporarily, and its impact on market demand is limited.
For the trend of the two varieties in the later period, the key factor of glass is demand, and the drive is closely related to spot production and sales, while the key factor of soda ash is supply, and the soda ash market is closely related to the capacity loss.
"The contradiction of glass lies in the high production capacity under weak demand. If the supply side releases water to reduce production, the contradiction between supply and demand can be greatly alleviated. On the demand side, the completion data of the real estate side declined seriously, and the real demand for flat glass was less than expected. However, on the micro level, the demand for home improvement and export is relatively good, and the overlapping policy is bottoming out, or it is not enough to achieve a collapsed decline. " Fan Ajiao said,
The variables of soda ash are mainly at the supply end. Apart from the normal maintenance behavior, Xuzhou Fengcheng (with a daily output of 500 tons) and Alashan (with a daily output of 3000 tons) have reduced their production due to equipment problems. In addition, the load of Qinghai Kunlun and CDB is 60%, and there are variables when these supply losses will return.
"The demand for soda ash is expected to continue to improve." Wei Chaoming said that in terms of sub-items, the total daily melting amount of float glass and photovoltaic glass hit a record high, and the demand for light alkali in industries such as lithium carbonate was booming, and the rate of heavy soda ash decreased. Before the arrival of the summer maintenance peak, the turning point of accumulated storage will gradually appear. In his view, the seasonal decline of soda ash production in summer is certain, and the high point at the end of January may be difficult to form a key pressure. At the same time, the inventory level of the industry has generally risen. If the energy and water consumption indicators of Yuanxing land smoothly, the space above the disk is limited. Comparatively speaking, the improvement of glass needs more favorable factors to accumulate.
In Wei Chaoming’s view, soda ash may resonate in the short term, and the market has a certain continuity; However, the glass linkage is short-term upward, and the probability of downward pressure in the later stage is greater.
Looking forward to the market outlook, Hu Peng believes that short-term soda ash futures and spot prices will oscillate strongly, especially the spot price may rise, further supporting the futures market. However, the market needs to be alert to the influence of imported goods on the domestic soda price after the internal and external price difference is raised. When the summer maintenance season is over, the supply pressure of soda ash will return, and SA2501 will face greater pressure. For glass futures, the price pressure is relatively high, and it may fall back again after the recent rebound.
In Hu Peng’s view, the support of soda ash supply side can last for some time. Before the end of summer maintenance, the price fluctuation of soda ash will be high, and the support below will be strong. The situation of oversupply of glass may run through the whole year, and the following needs to focus on the support of the cost side. In operation, he suggested that upstream enterprises can seize the recent rebound to sell hedging opportunities and lock in the profit of glass sales.
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