Demand after the earthquake “First suppress and then rise” Global resource prices responded

In Japan, where resources are scarce, the demand for upstream industrial raw materials such as iron ore, coal, and non-ferrous metals is huge. After the strong earthquake, the global energy structure was greatly affected due to suspension of production and transportation of some of its factories, and the temporary suspension of procurement. The price of the Stone April swap contract has dropped by 7%, showing a rare low in recent years, while the prices of non-ferrous metals such as copper and aluminum and international coal also declined. However, in the long run, with the start of post-disaster reconstruction, Japan The demand for energy will increase, and the prices of global resources products are expected to usher in good news.

The short-term possible price increase for chemical refinery explosion chemicals was affected by the earthquake and an explosion occurred at the Cosmo refinery in Chiba Prefecture, Japan. According to the “First Financial Daily”, many chemical companies in Japan are also clustered near Chiba Prefecture. For example, Mitsui Chemicals owns a bisphenol A plant in Chiba Prefecture. Idemitsu Kosan Co., Ltd. and Mitsui Chemicals also jointly manufacture phenol in the same area. **Wait. According to sources, the refineries in Kanagawa and Ibaraki were discontinued due to the earthquake, and Maruzen Oil and Mitsui Chemicals also stopped work immediately after the explosion.

The industry believes that the suspension of production of refineries and chemical companies in Japan may have an impact on the international chemical market, and the price of some products may rise accordingly.

Hongyuan Securities petrochemical analyst Chai Haohu estimates that in the coming days propylene, ethylene and other olefin products will rise due to the suspension of Japanese refineries. “Japan is a country known for its production of fine chemicals and high-end chemicals, and supplies such as polycarbonate will be limited.” He said that polycarbonate, an engineering plastic based mainly on bisphenol A, is currently used in China. It is necessary to import this product. Its manufacturers include Japan's first-tier chemical companies such as Teijin, Asahi Kasei, and Mitsubishi Engineering Plastics.

Global propylene oxide prices may also be pushed to a high level due to the earthquake in Japan. Japanese manufacturers include Asahi Glass and NOC, and the two companies have a total capacity of about 400,000 tons of propylene oxide. If the earthquake disrupts production, the market price will be pushed up. UBS Securities's analysis report pointed out that since 2006, China's downstream polyether industry continues to increase its demand for propylene oxide, so the import volume has also been pushed up. In 2010, the import volume of the product reached 362,000 tons, accounting for about 25% of the apparent consumption. In 2011, the gap between the supply and demand of this product may be further expanded.

In addition to problems with the supply of chemicals, the earthquake will also affect the international rubber market. In 2010, Japan imported about 750,000 tons of rubber, and Mr. Hu, a sales manager of a rubber import company registered in Xiamen, told reporters that Japan's Bridgestone, Yokohama, and Sumitomo may be affected by transportation and affect rubber procurement.

In addition, due to the psychological effect of investors, the price of Japanese rubber** will increase. In the short term, the spot price of rubber will be increased. “After the earthquake, the rescue will require more mechanical facilities and the use of tires for construction will increase,” Mr. Hu said. Ge Guorong, deputy general manager of Chinagled Rubber, also told reporters: "Since all Japanese housing needs rubber mats, the amount of glue used in post-disaster reconstruction projects will increase."

However, a management team of Cooper Chengshan (Shandong) Tire Co., Ltd. stated that in 2011, the global demand for natural rubber was 10.2 million tons, and the actual output was 9.7 million tons. The overall market supply and demand balance. However, it is not ruled out that some speculators in the name of the earthquake may push up the price of rubber in a short period of time.

Japan's coal-fired power plant damaged international coal prices may first suppress the earthquake in Japan after the destruction of the Fukushima nuclear power plant, the "First Financial Daily" learned from industry sources, the earthquake site near Sendai is the dense area of ​​the Japanese thermal power plant One of the experts believes that Japan’s thermal power is also difficult to escape. As a result, sharp declines in demand in the short term and long-term demand surges, which may cause international coal prices to show signs of decline.

As the general manager of the first business department of China Coal’s original coal export business, Huang Teng has been engaged in the Sino-Japanese coal trade since the 1980s. Huang Teng believes that the damage of thermal power plants will affect Japan and even the world. The energy pattern has a certain impact.

There are ten major companies in Japan's power industry. The most severely damaged in the earthquake was Tokyo Electric Power Co., Ltd. and Tohoku Electric Power Co., Ltd. Huang Teng told the newspaper that the thermal power plant of Dongbei Electric Power Company was relatively concentrated in the epicenter of Sendai. The famous thermal power plant called Soma has two super-supercritical generator sets of 1 million kilowatts, including the No. 1 unit. It was just overhauled before the earthquake. The thermal power plants of Tokyo Electric Power Co., the largest power company in Japan, are mainly distributed along the coast of Tokyo Bay and Sendai. This part of the power plants near the port may also be damaged in the earthquake. There are no specific statistics.

The damage to thermal power plants and major coastal transportation ports will directly lead to a sharp decline in coal demand in Japan in the short term. From the perspective of Japan’s energy consumption structure, “BP2010 World Energy Statistics Report” shows that Japan’s crude oil consumption in 2009 was 198 million tons, and consumed natural gas with heat equivalent to approximately 80 million tons of crude oil, and heat equivalent to approximately 108 million tons of crude oil. Coal. At the same time, in the power generation and energy consumption structure, nuclear power accounts for 30%, coal-fired power for 18%, and fuel power for more than 10%.

According to Huang Teng, Japan is a large importer of coal. The global coal trade volume is about 900 million tons, and Japan’s one country accounts for 200 million tons. The coal used for thermal power generation is about 100 million tons, the amount of coal for cement is about 10 million tons, the steel is 70 million to 80 million tons, and the coal for chemical use such as papermaking is about 10 million tons. Therefore, Japan’s coal demand has a decisive position in the international market. If Japan’s demand drops sharply, international coal prices must be “involved”.

At present, the spot price of international coal is about US$120/ton, and Huang Teng predicts that under the influence of the Japan earthquake, international coal prices will fall to around US$100/ton in the short term.

However, the sharp drop in Japanese demand may only be a temporary phenomenon. The reconstruction and restoration of ports and thermal power plants will take about two months, so Huang Teng expects that Japan will start energy demand after two months. In the long run, Japan may form a huge demand for coal at the end of this year, bringing international coal prices to new highs.

The price of iron ore produced by steel companies such as the Nippon Steel Corporation and Japan Iron & Steel Corporation plunged. "Under the earthquake in Japan, the price of iron ore swap contracts fell freely on March 11 and the main contract in April fell by 7% on the same day." Iron Ore Swaps Li Meng, a senior iron ore and freight derivatives broker at FIS, a trading broker, told China Business News yesterday that “this is a relatively large drop in iron ore prices since 2011.”

Due to the main layout of the Japanese steel plant along the coast, many steel companies were forced to stop production due to the earthquake. Li Meng said: "After the Great Hanshin Earthquake in 1995, steel prices have risen sharply. The earthquake is far more powerful than the Great Hanshin earthquake and is expected to lead to higher steel prices. China's steel prices are currently the lowest in the world and may benefit from this."

Demand for steel mills to stop production will increase Han Sung, regional manager of China Steel Business Unit (SBB) TSI index, told the newspaper yesterday that the production bases of five Japanese steel mills in Tokyo Bay have been affected and the port facilities are not functioning properly. In addition, Tokyo There are many Japanese steel mills' scrap terminal storage bases in the bay, which will also be affected.

According to a public report, the steel plant of Japan’s largest steel company, Nippon Steel Corporation, located in Kamai, Iwate Prefecture, has stopped production and is currently inspecting the damage to the boiler equipment. In addition, the blast furnace in the Kashima iron and steel plant of the Sumitomo Metal Industry Co., Ltd. in Ibaraki Prefecture was damaged, and the blast furnace has been shut down after the earthquake. A fire broke out at Japan Iron and Steel Engineering Holding Co.'s steel plant in Chiba.

Foreign media quoted TSM analyst Tim Hard in London as saying that the five steel mills in Tokyo Bay had suffered structural damage and could not be restored in the short term.

As an infrastructure raw material, steel will become the most important material for post-disaster reconstruction. “This is a good thing for Chinese steel companies.” Hu Yanping, a joint metal analyst, told the newspaper that the suspension of production of Japanese steel mills will reduce the global steel supply.

Japan's crude steel production is second only to China. Benefiting from stable exports to Asia, Japan’s crude steel production in 2010 was close to 110 million tons, a year-on-year increase of 25%, the largest increase in 43 years. Last year, China's crude steel production reached a record 627 million tons.

Hu Yanping believes that Japan’s post-disaster reconstruction will lead to a significant increase in steel demand, while the suspension of production by Japanese steel mills will provide an opportunity for China’s steel exports to increase.

Although China is the world’s largest producer of steel, China still imported 7.78 million tons of steel from Japan in 2010, a year-on-year increase of 27%, while in the same year China’s steel exports to Japan increased by 92% year-on-year, but only 81%. Ten thousand tons.

Korean steel companies are also one of the world’s biggest steel companies’ competitors. "The earthquake is also good news for Korean steel companies," Hu Yanping said.

The Japan Iron and Steel Federation had previously forecast that Japan's crude steel exports in the 2010 fiscal year will decline slightly to 40 million tons. The reason for the decline is that South Korean steel companies continue to adopt new types of production equipment, and Japanese steel companies are increasingly heating up in product price competition. Coupled with the continued appreciation of the yen, Japan’s crude steel exports are under heavy pressure.

The sudden drop in the price of iron ore and the sudden suspension of production by Japanese steel companies led to a sharp drop in demand for iron ore. Tim Hard believes that the affected steel mills in Japan may suspend production for up to six months, which means that the seaborne iron ore market may lose 22,200,000 tons of iron ore demand.

The Japanese steel mills are the largest customers of the world's three largest mining companies in Asia except China, mainly based on long-term mines. “As the steel mills have stopped production, the long-term mines have not been released for the time being.” Li Meng believes that the market was originally on the sidelines, and this quake aggravated the wait-and-see sentiment that the current spot price of iron ore Chinese ports is more than 170 US dollars. / Ton, but the main contract in April is only more than 140 US dollars / ton, "the spot mine can not sell, so it can only suppress the ** market."

Just prior to this, Japanese steel companies had just reached a major increase in iron ore supply agreements with international iron ore giants. According to previous reports by the Japanese media, the price of imported iron ore from Japan will increase by about 25% from the first quarter of 2011, a record high since April. In addition, the price of coal for steelmaking is approximately US$290 per ton, which is approximately 35% higher than the price in the first quarter and is the second highest in history.

In fact, prior to this earthquake, the global demand for iron ore has already shown a downward trend. According to the latest import and export data from China Customs, in February China imported 48.64 million tons of iron ore, compared with 49.38 million tons imported in the same period of last year, a year-on-year decrease of 740,000 tons, a year-on-year decrease of 1.50%, and the import volume has dropped sharply.

At present, the inventory of iron ore in China's ports has reached a record high. Xu Guangjian, an analyst of metallurgical iron ore, told the newspaper that on the 4th of March, the inventory of iron ore ports reached more than 80 million tons, an increase of 7.99 million tons compared with January 7, including 1.67 million tons of Indian ore. With the high iron ore capacity in the port as the premise, based on the high iron ore price and the pessimistic expectation of the steel market, the importer has clearly changed its willingness to speculate in the early stage and turned to prudent and wait-and-see moderation, and a significant drop in import volume will become inevitable. Han Xun also believes that international ore prices are now falling in the channel, and the suspension of Japanese steel companies will certainly affect market sentiment.

Non-ferrous metal non-ferrous metal short-term bad reconstruction is expected to stimulate the rise in copper and aluminum due to the earthquake and tsunami in Japan caused a number of automakers, motor companies were forced to stop production, analysts said that in the short term will be bad copper, aluminum and other non-ferrous metal prices, but in the long term is expected to promote Large non-ferrous metals prices rose.

Analyst Dan Guibin said in an interview with the “First Financial Daily” yesterday that before the post-disaster reconstruction, Japan’s demand for non-ferrous metals such as copper and aluminum will decline, which will cause its price to drop.

According to the report, on the 11th of March, Lonco copper opened at 9235 U.S. dollars per ton, and was affected by the strong earthquake in Japan in the afternoon. The dive broke through 9100 U.S. dollars per ton, and the probe lowered to 9060 U.S. dollars per ton. As the largest variety of non-ferrous metals, aluminum prices have also been hit. On the 11th of March, Lon-Aluminum electronic discs quickly dipped with the US dollar and broke through the 5th, 20th, and 30th consecutive averages.

"However, in the long run, due to the need for post-disaster reconstruction and the increasing demand for automobiles, electronics and other products, the price of non-ferrous metals will be boosted," says Shan Guibin.

Japan is a major consumer of aluminum. In 2008, the aluminum consumption was 2.25 million tons, which was only less than the 12.14 million tons in China and 5.62 million tons in the United States. According to Shan Guibin, Japan’s aluminum imports are all dependent on imports. In Japan's aluminum consumption structure, transportation machinery such as automobiles is the largest consumer group, accounting for 38.7% of Japanese aluminum consumption in 2009.

According to Shan Guibin, Japan's post-earthquake reconstruction will boost China Aluminum's exports, which will reduce China's aluminum excess capacity. In 2010, the output of electrolytic aluminum in China was 16.19 million tons, an increase of 26.1% over the previous year, but only 411,300 tons of aluminum was exported to Japan.

“The post-disaster reconstruction will also stimulate the consumption of copper metal. However, due to the current inability to assess the extent of the earthquake, it is impossible to measure the degree of demand.” An Yuke Copper analyst Li Yusheng said yesterday. According to him, Japan’s current copper production capacity is about 1.3 million tons, and its annual consumption is about 900,000 tons. “The post-disaster reconstruction may not be as big as copper for aluminum.”

China itself is a net importer of copper. According to statistics from the China Non-Ferrous Metals Industry Association, China's refined copper production reached 4.573 million tons in 2010, an increase of 11.3% year-on-year; refined copper imports amounted to 2.92 million tons, 8.3% year-on-year, but it is still the second peak of historical import.

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