Policy Survival 2011 will be more twisted

The recovery of the world economy and the macro environment are still laying the foundation for the bull market of commodities. However, China and the United States may introduce some new tightening policies in 2011, which will put pressure on the composition of commodity prices. The trend in 2011 may be even more tortuous.
The Economic Information Daily reported on December 31 that for the past two years, the market trend basically accorded with our judgment at the beginning of the year: 2009 is a century crisis, a century-long opportunity, commodity V-shaped reversal; in 2010, the entire commodity market is concussive. Upward, it was converted from "fast cow" to "slow cow."
Looking ahead to 2011, we believe that commodities are still in the rising cycle and are currently in the second phase of the bull market. The recovery of the world economy and the macro-environment are still good, laying the foundation for the bull market of commodities. However, China and the United States, which lead the world economic growth, may introduce some new tightening policies in 2011. This will suppress the composition of commodity prices, and does not rule out the possibility of major adjustments. The trend of next year may be even more tortuous.

The rising trend of the world economy is still well known. The two major engines that lead the world’s economic growth are the United States and China. The economic conditions of the two countries have an important impact on the world economy. At present, some leading indicators for the economy indicate that both economies are in a steady recovery, and both countries' real economic operations are also in a steady upward phase.
From the perspective of China’s own economic development, although some tightened liquidity measures were introduced this year, it did not change the overall trend of China’s economic recovery; from the perspective of the troika driving China’s economic growth, it still showed a steady growth trend. This shows that the Chinese economy continues to improve.
In October, the International Monetary Organization released the latest issue of the "World Economic Outlook" report, saying that the global economic recovery continues to advance. The report points out that emerging and developing economies will continue to be the main driving force for global economic growth. Continue to lead the developed countries. According to the latest forecast of IM F, in 2010 and 2011, the global economic growth rate is expected to reach 4.8% and 4.2%, respectively. Output of emerging and developing economies will increase by 7.1% and 6.4% in 2010 and 2011 respectively. Among them, China’s economic growth this year and next is expected to maintain its 10.5% and 9.6% leaders unchanged. The growth rates of advanced economies in the next two years are 2.7% and 2.2%. The IMF's forecast further shows that the world economy is still in a recovery trend and is unlikely to fall into a secondary recession.

Commodity supply and demand remain tight Macroeconomic recovery is bound to pull demand for commodities. Since the supply of industrial products will not change much in the short term, their prices will be greatly affected by demand, while the demand for agricultural products will show a steady increase, and the supply will be affected by the weather. Therefore, the prices of industrial products are mainly affected by the supply side.
Let us first analyze the industrial products that have the closest macroeconomic links.
Taking copper as an example, from the perspective of consumption structure, China’s copper is mainly used in power electronics, home appliances and construction industries. In November of this year, China’s power cable, power generation equipment, air conditioners, refrigerators, and washing machines grew at a monthly rate of 32.89% and 11.88 respectively. The cumulative growth rates from January to November were 26.87%, 10.37%, 40.3%, 28.45%, and 29.44%, respectively. Compared with the growth rate of copper rod production of 10.89% and refined copper supply of 4.14% in the first 11 months, the growth rate of end-use consumer product production was significantly faster. Therefore, China's copper spot demand this year is not so low on the surface, and the growth rate of terminal consumption is still considerable. From a long-term perspective, the State Grid Corporation of China's “12th Five-Year Plan” shows that grid investment will exceed 1.7 trillion yuan, a substantial increase of 40% compared with 1.2 trillion yuan during the “Eleventh Five-Year Plan” period. In addition, the policy of stimulating consumption from home appliances to the countryside, trade-in replacement, etc. will continue to be vigorously promoted in 2011. Therefore, China's demand may still be the driving force for the new round of rising copper prices.
Another major commodity rebar, about 50% is applied to the real estate industry.
According to the latest data released by the National Bureau of Statistics, in 2011, the scale of housing construction for affordable housing projects in China will reach 10 million units, an increase of 72.4% from 5.8 million units in 2010. The project investment will reach 1.4 trillion yuan***, which will undoubtedly greatly stimulate the demand for rebar, leading to a new round of rise.
As the main agricultural product of the commodity market, this year's cotton and sugar have caused major problems due to the supply side. This has led to an intensification of contradictions between supply and demand, which has led to a wave of large and large markets. The price broke through the old range and started in the new range. Running. Looking ahead to next year, we believe that this tight supply and demand situation will continue, so its price will remain at a high level.
For beans and oils and fats, since their prices are still relatively small relative to other agricultural products, their price center of gravity is expected to shift upwards in 2011 as a whole. US soybeans are in a bull market cycle, the weather conditions in South America's major soybean producing areas, U SD A's adjustments to US soybean demand estimates, the trend of the US dollar index, and the competition for North American soybean acreage, all of which are expected to trigger the US soybean price in 2011. The fuse of the rebound.
Crude oil, the leader in bulk commodities, consolidated at the bottom for a year and a half while other energy and raw materials soared. In the coming period of time, the possibility of crude oil replenishing will be very high. The situation in the Korean peninsula is likely to be the trigger for rising crude oil prices. At present, the unstable situation on the Korean Peninsula has been regarded as the main risk to be noticed in Asia next year. Therefore, the 2011 crude oil futures price is expected to usher in a new round of rise, or it will push up the price of beans, especially soybean oil. Coupled with the global soybean oil stocks and consumption ratio fell to a new low in recent years, it is expected that soybean oil prices in 2011 relative to soybean and soybean meal will have greater room for growth.

Global inflation is inevitably a global excess of liquidity, and it is also an important factor in the rise of commodity prices.
Although China's central economic work conference held a moderately relaxed monetary policy in 2011, the scale of new credit reported by the National Development and Reform Commission remains at 7.5 trillion yuan, which is equal to this year's level and more than doubles the normal year. At present, the currency in the Chinese market is still very abundant.
After the U.S. took easing monetary policy in 2009, the Fed announced the launch of the second round of quantitative easing monetary policy in November 2010. The Fed will purchase another US$600 billion long-term U.S. Treasury bond before the end of June 2011; the euro area will use 1100 this year. After the euro bailout of Greece, which was deeply involved in the debt crisis, it has decided to provide Ireland with 85 billion euros in relief. The European Central Bank announced on December 2 that it will continue to maintain the leading interest rate of 16 eurozone countries at 1%, which is the European Central Bank. For the 20th consecutive month, the interest rate was maintained at this historically low level, indicating that it will continue to maintain a loose monetary policy and slow down the exit policy.
The world’s major economies have continued to loosen their relatively loose monetary policy, making future global inflation inevitable, while high inflation will accompany high economic growth. At present, the world economy has not yet reached a period of rapid growth. Therefore, at present, there is only a sign of inflation. However, as the economy continues to improve, global inflation will inevitably come, which will push up commodity prices.

Policy orientation may tend to tighten At present, the upward trend of commodity prices has not changed, and the main factor constraining its sharp rise in price is the series of tightening policies that the major economies of the world may issue.
The Central Economic Work Conference pointed out that next year's monetary policy will be converted from moderately loose to steady, which shows that the country is likely to introduce a series of regulatory policies to deal with rising prices.
In the United States, where interest rates have been at historically low levels for a long time, with the gradual recovery of the economy, it is not ruled out that austerity measures such as raising interest rates will be introduced next year. If these policies are introduced, they will lead to a substantial adjustment in the commodity market. This is the market risk that investors need to focus on in 2011.
However, historical analysis also shows that the historical interest rate increase cycle is also a rising cycle of the capital market. The exertion of the government’s tightening policy needs a process. Early policy effects will be “stored up” by the market, and will only erupt after a certain degree of accumulation.
It should now be said that commodities are still in the second wave of rising bull market, but the second band will generally go more complicated and take a longer time. The fluctuation should not have been so great in the middle, but due to policy issues, it may lead to market fluctuations. Great.
Overall, judging from the current world economic development, the world economy will continue to maintain growth in 2010. Developing countries and post-developing countries led by China will become the new engine of growth for the world economy. Since the industrial structure of the vast number of developing countries is mainly in the development stage of the primary and secondary industries, the amount of energy and bulk raw materials consumed per unit of GDP output is relatively large. Therefore, the rapid development of the economy will inevitably increase the The demand for basic energy and bulk raw materials. The global excess liquidity will inevitably lead to global inflation. Under the support of these two major factors, commodity prices will continue to rise in the general trend, and the commodity bull market structure will not fundamentally change.
However, at the same time, the world economy is growing unevenly. The sustainability and possible shift of the two major engines of China and the United States monetary policy have brought great uncertainty to the trend of commodity prices. After a sharp increase in 2010, they cannot be ruled out. A certain degree of adjustment. However, we believe that any major adjustment is a good opportunity for investors to buy, and it is also a good time for related companies to buy hedging. Investors can use “buy, buy, sell, and sell; "Small trend" investment strategy, grasp the rhythm to obtain investment returns.