Do you remember that on April 20, 2020, the United States*** experienced a historic negative value, falling to -$40 barrels at one point?On that day, global markets were shocked, investors were terrified, and producing countries were miserable. That's because of the global demand caused by the new crown epidemic**, and **surplus, full inventory, resulting in**no one cares, and even has to pay people to take it away.
Now, three years later, the market has seen a significant situation again. On December 13, 2023, the United States*** briefly fell below $60 barrels, hitting a new low in nearly a year.
At the same time, there has been a general dive in other commodity markets, including metals, agricultural products, chemicals, etc. Among them, soda ash, as an important chemical raw material, has not been spared and continues to consolidate at a low level without obvious signs. What the hell is going on?Why is there such a big drop in ** and other commodities?
* The volatility of the market depends mainly on the balance of supply and demand. Changes in supply and demand will eventually be reflected in the increase or decrease of inventory. Generally speaking, when there is greater than demand, the inventory increasesWhen demand is greater than **, inventory decreases, **will**.
*The supply and demand of the market are affected by many factors, including seasonality, geopolitics, policies of oil-producing countries, and the development of new energy sources. Among them, seasonality is a more obvious factor, which will lead to periodic changes in demand and inventory.
According to the U.S. Energy Information Administration, the seasonal characteristics of U.S. commercial inventories are basically from January to April every year, from May to September, from October to November, and in December. This is mainly due to the fact that January to April is winter, the northern hemisphere has lower temperatures and weaker demand, and at the same time, in order to prepare for the summer tourist season, refineries will stockpile** in advance, resulting in an increase in inventory.
The summer months run from May to September, when temperatures are higher and demand is stronger in the Northern Hemisphere, and refineries ramp up production and deplete inventories, resulting in reduced inventories. In the autumn months of October-November, temperatures in the Northern Hemisphere gradually decrease, demand weakens, and refineries begin to enter a maintenance period, reducing production and increasing inventories. Winter is in December, when temperatures are cooler and demand is stronger in the Northern Hemisphere, while refineries resume production and deplete inventories, resulting in reduced inventories.
Therefore, from a seasonal point of view, in December every year, there will be a turning point in the demand and inventory of the ** market, from accumulation to destocking, from weakening demand to increasing demand, which should have formed a support for ***. But why did the market see a significant situation in December this year?
In addition to the balance of supply and demand, the volatility of the market is also affected by the global economic situation and the trend of the US dollar. Generally speaking, when the global economy is growing strongly, there is an increase in demand, and it willWhen global economic growth is weak, demand decreases, it will. At the same time, since it is denominated in US dollars, when the US dollar strengthens, it willWhen the dollar weakens, it will.
Recently, there have been some uncertainties and risks in the global economic situation, and the recurrence and mutation of the new crown epidemic have led to a new round of lockdowns and restrictions in some countries and regions, which have affected economic activities and the flow of people, and inhibited the recovery of demand.
The U.S. Federal Reserve accelerated the tapering of its monthly Treasury purchases and mortgage support** from $150 billion per month to $75 billion per month, and signaled that it could raise interest rates three times next year to combat inflationary pressures, which led to a stronger dollar, putting pressure on ***.
Tensions between Russia and the European Union, which led to the EU's threat to impose new sanctions on Russia, including restrictions on its energy exports, have raised market fears of disruption and supported it.
The current global economic situation and the impact of the US dollar trend on the ** market are mutually neutralized, with both negative and positive factors, resulting in a lack of clear direction. However, if there is a sudden change in certain factors in the future, such as the worsening or easing of the epidemic, a sharp appreciation or depreciation of the US dollar, and an escalation or détente in Russia or Iran, then there may be significant volatility and investors need to pay close attention.
Soda ash, also known as soda ash, is an important chemical raw material, widely used in glass, detergent, paper, dyes, soap and other industries. The first soda ash is not only affected by the first, but also affected by the supply and demand pattern at home and abroad.
Due to the continuous expansion of domestic soda ash production capacity in recent years, and the slow growth of demand, the market is oversupplied and the inventory pressure is greater. Especially in winter, due to the lower temperature, the demand of soda ash consumption industries such as glass, detergents, etc. decreases, and producers are reluctant to reduce production in order to maintain capacity utilization, resulting in an imbalance between supply and demand in the market,**
As the domestic soda ash ** is higher than the international market, some downstream users turn to imported soda ash, which increases the competitive pressure in the domestic market. Especially this year, due to the increase in soda ash production capacity in the United States, India, Turkey and other countries, and the impact of the epidemic, the soda ash exports of these countries have increased and declined, which has had an impact on the domestic market.
The current supply and demand pattern of the soda ash market is not conducive to the first level, but continues to consolidate at a low level. However, if there are changes in some factors in the future, such as the recovery of domestic demand, the reduction of foreign imports, and the development of raw materials, then soda ash may reverse, and investors need to pay close attention.
* and other commodities fell sharply, the result of a combination of factors, including seasonal factors, global economic conditions and the trend of the US dollar, as well as the supply and demand pattern of their respective markets.
Changes in these factors will have different impacts on our lives and investments, and we need to respond and adjust according to our own situation. At the same time, we should also pay attention to some possible emergencies, such as the epidemic, geopolitics, weather, etc., these events may have an impact on the market, resulting in large fluctuations, we must do a good job in risk management to avoid losses.