The rising prices of means of production in the international market have affected the Chinese economy

At the beginning of the new year, the prices of means of production represented by crude oil, non-ferrous metals and steel in the international market have all risen, affecting the Chinese economy. The nerve of all aspects of China’s economy. The crude oil futures price in the New York market rose from US$42.12/barrel on January 3 to US$51.48/barrel on March 1; three-month comprehensive copper in London rose from US$2,910/ton on January 4 to US$2,910/ton on January 4. On March 28, it reached US$3,265 per ton, setting a new high in 15 years. During the same period, London's three-month comprehensive aluminum rose from US$1,805/ton to US$1,924.5/ton, and zinc rose from US$1,177.5/ton to US$1,409/ton; Chinese steel mills and the world's two largest iron ore mines Stone producers reached an agreement on annual ore prices, with a price increase of 71.5%; international iron ore prices rose sharply, and the steel price index CRU also rose slightly during the year. …Reason: U.S. factors fuel the rise. In terms of long-term trends, the rise in prices of means of production is a reflection of the adjustment in the price relationship between downstream products and upstream non-renewable resources caused by technological progress on a global scale. From the mid-term analysis, the recovery of the US economy, the continued weakness of the US dollar and the good expectations for China's economic growth are the main reasons for the strengthening of the prices of major means of production in the international market. Data released by the U.S. Department of Commerce on the 25th showed that in the fourth quarter of 2004, the U.S. GDP grew at an annualized rate of 3.8%, which was higher than the market consensus. At the same time, this also brought the U.S. economic growth rate for the whole year of 2004 to 4.0%. .4%, much higher than 3% in 2003. The strong recovery of the U.S. economy has boosted demand for production materials in the international market and also pushed up the prices of related products. In terms of the US dollar, although the US dollar has rebounded slightly against other major currencies since the end of last year, in the eyes of analysts, the US dollar has not yet emerged from the shadow of weakness. Affected by the ongoing twin deficits, its future trend is not optimistic. In the international market, crude oil, non-ferrous metals and other means of production are all priced in US dollars. The weakness of the US dollar has not changed, and at least it cannot be the driving force to reverse the upward trend in raw material commodity prices in the past two years. In particular, the sharp year-on-year rise in international iron ore prices is closely related to the decline of the US dollar over the past year. As far as China's economy is concerned, last year's macro-control had led to strong market expectations for a slowdown in its growth rate. In the early stages of the regulation, domestic steel prices plummeted, which in turn affected international market prices. However, judging from the recent performance, China's economy still maintains a steady and rapid growth rate. As demand from China occupies a pivotal position in the international production means market, its good macroeconomic performance has undoubtedly given a boost to the rise in raw material prices. In addition to these unique factors, as far as specific varieties are concerned, the price increase also contains certain personalized factors, especially in the short term. According to Li Guohong, a researcher at Galaxy Securities, the cold wave hitting the United States and Europe, which has led to an increase in the use of heating oil, is an important reason for the recent rise in international crude oil prices. The uncertainty caused by nuclear issues and earthquakes to Iran, a major oil-producing country, has also This has contributed to the rise in oil prices. Regarding the rise in prices of non-ferrous varieties, Guotai Junan Zhou Ming believes that price fluctuations have certain seasonal characteristics, and non-ferrous varieties have relatively good market performance in the first quarter of each year. In addition, some domestic production companies suspended production during the Spring Festival, which intensified the contradiction between supply and demand in the short term, and also affected the supply and demand relationship in the international market accordingly. Trend: High level shock Regarding the future trend of prices of various means of production, “high level shock” has almost become the unanimous view of analysts. According to Haitong Securities Yong Zhiqiang, although it is difficult for the CRU index to break through the historical high reached in October last year within the foreseeable range, there are no signs of change due to fundamental factors such as the depreciation of the US dollar, China's economic growth, and the economic recovery of the United States and Japan. At the same time, Affected by rising costs caused by rising iron ore prices, international steel prices are still difficult to lower. Zheng Dong of Guosen Securities believes that with the commissioning of new international iron ore production capacity next year and the effectiveness of China's rectification of iron ore circulation order, iron ore prices may peak and fall by then. For non-ferrous metals, after various sub-species have experienced general gains since the beginning of the year, their future trends may diverge. Most industry insiders believe that compared with 2004, the global supply and demand gap for refined copper will narrow this year, and copper prices are also expected to fall. At the same time, the consensus among industry insiders is that driven by the strong demand from downstream galvanized sheet and other industries, coupled with the tight supply of zinc concentrate in the international market, there will still be a large gap in zinc supply and demand during the year, which will support the international zinc industry. The price strengthened further. 65% of production originates from the Middle East and 40% of demand comes from the United States, which forms the basic framework of supply and demand in the international crude oil market. Therefore, the demand growth brought about by the U.S. economic recovery and the uncertain political situation in Iraq and Iran in the Middle East have raised hidden concerns about supply, which will form a strong support for the maintenance of high crude oil prices. Impact: Some are happy and some are sad. Against the backdrop of the increasingly deepening integration of China's economy with the world economy, the continued rise in global prices of means of production will undoubtedly have an important impact on the operation of my country's macroeconomy and related industries. Based on the calculation of my country's crude oil import volume last year of 120 million tons, if the annual average price of crude oil rises by US$10/barrel, it will directly increase the import cost by more than US$8 billion.

The rise in costs will, on the one hand, reduce the economic growth rate, and on the other hand, may form imported inflation. Rising prices of basic raw materials such as non-ferrous metals and iron ore will also have a similar impact. In terms of industry, the rise in crude oil prices will make the oil exploration industry a direct beneficiary. Refining, petrochemical raw materials and other links in the industrial chain can often benefit from the rise in crude oil prices due to their strong cost-passing capabilities. However, for Downstream rubber, plastics, chemical fiber and other industries have sufficient competition and weak ability to pass on costs, so their profitability will be impacted by high oil prices. In addition, the transportation industry including aviation and public transportation will also be affected to varying degrees. Analysts believe that due to the sharp rise in iron ore prices, steel companies are facing rising cost pressures this year. Due to the gap between supply and demand and high added value, plate products can effectively resolve the adverse effects of rising costs, but it is difficult to do this with steel for construction. It is expected that the annual profit level of the steel industry will drop from 80 billion in 2004 to about 70 billion.