According to data released by the China Federation of Logistics and Purchasing on June 5, the China Commodity Index (CBMI) in May 2021 was 100.2%, a decrease of 3.1 percentage points from the previous month. The index dropped significantly after rising for three consecutive months. The analysis believes that overall, the supply and demand fundamentals of China’s domestic bulk commodity market are still good.
Among the sub-indices, the supply index, the sales index, and the inventory index all declined, while the sales index fell sharply. Judging from the changes in the index this month, the bilateral linkage between supply and demand has declined, which seems to indicate that the market will usher in the off-season ahead of schedule, and the operating pressure will begin to increase. However, although the sales index has fallen sharply this month, the index level is still higher than the supply index, and the inventory index continues to decline. On the whole, the supply and demand fundamentals of China’s domestic bulk commodity market are still good, supply and demand are still in equilibrium, and commodity inventories continue to decline.
Data show that in May, the commodity supply index fell by 2.1 percentage points from the previous month to 100.6%, and the index fell to the lowest level in the past five months. From the perspective of major commodities, production profit is still an important factor affecting commodity supply. The supply of steel, non-ferrous metals and other commodities continued to grow this month, but as coal, automobiles and other commodities are subject to factors such as raw material supply and reduced imports, there is a situation of reduced supply.
According to the analysis, looking forward to June, the Chinese market will enter the traditional consumption slack season, and the fundamentals of supply and demand will usher in new changes: the seasonal weakening of demand intensity in all parts of China; Recently, the price has gradually returned to rationality, the production profit of enterprises has been greatly compressed, the intention to stop production and reduce production has been strengthened, the power in the superimposed area is tight, the pressure of environmental protection is increasing, the production of commodities is difficult to continue to grow, and the pressure on the supply side will continue to be reduced in the later stage.
On the whole, there are signs of further weakening at both ends of supply and demand in June, and the Chinese market will be tested across the board. However, as prices return to reasonable levels, the market still has a supporting foundation in the short term.
Source: China News Network