Recently, affected by factors such as the weakening of supply elasticity and rising demand, global energy products have ushered in a round of sharp rise. Data shows that the current price of ICE oil distribution has exceeded US$83/barrel. Natural gas prices rose by 36% in September. Domestic coal prices also rose to a high level. The price of thermal coal rose by 61% in September, which has exceeded 1500 yuan/ton.
How do you view the new round of price increases for energy products?
In this round of energy product price increases, demand is part of the reason, and more of it is driven by supply. In terms of demand, first, with the gradual increase in vaccination rates in Europe and the United States, the introduction of new vaccines and the gradual recovery of the economy, residents' travel consumption has picked up, and the demand for energy products such as petroleum has increased. The second is that as the northern hemisphere approaches winter, heating is gradually started in various regions, and energy demand will enter a seasonal peak period. In particular, the current domestic power plant coal inventory is low, and now it is time for traditional winter coal to restock the inventory. The large inventory gap also keeps the market's demand for thermal coal at a high level.
In contrast, the constraints on the supply side are more important. First, due to environmental protection and other considerations, domestic coal production was limited. Although the supply has rebounded recently under the policy of ensuring supply and stabilizing prices, it will take time. Second, the epidemic in some energy-supplying countries has not yet eased, and the recovery of production has been slow. Third, the United States has repeatedly imposed sanctions on Russian companies that supply natural gas to Europe, which has also affected the supply to a certain extent.
In general, the main reason for this round of energy price increases is that there are constraints on the supply side. Under supply constraints, demand fluctuations will bring about more obvious price fluctuations. However, many places have begun to increase the supply of coal, etc., emphasizing that carbon reduction cannot be "exercised". The National Development and Reform Commission has also recently issued a strong signal to the market to promote the return of coal prices to a reasonable range and promote the return of the coal market to rationality. With the restoration of supply, the continuity of the price increase of thermal coal and other energy products is limited.
What is the impact of rising energy product prices on enterprises and the market?
On the corporate side, the current domestic prices of raw materials and energy are constantly rising on the one hand, and on the other hand, prices are not transmitted smoothly to the downstream due to weak consumption. Under this circumstance, manufacturing companies, especially small and medium-sized manufacturing companies, are facing greater cost pressures. The profit data of industrial enterprises in August showed that the profit margin of operating income of the manufacturing industry, especially the mid-and downstream manufacturing industry, has declined. It is expected that the pressure on the manufacturing cost side will remain relatively high in the short term.
For example, in order to alleviate the cost pressure faced by power plants, policies have begun to promote the reform of the electricity market and expand the range of fluctuations in market transaction electricity prices. As electricity prices rise, the electricity costs of enterprises, especially high-energy-consuming enterprises, will also begin to rise. For energy-related companies, rising prices of commodities such as energy can boost the profits of related companies.
What are the impacts of the timber industry?
For wood companies, the increase in the price of upstream raw materials has led to higher costs in the construction template industry; the increase in oil prices is transmitted to the transportation industry, which will pass on the cost to wood-related sales costs; the increase in electricity prices also causes the energy costs of wood processing companies to lift. A number of costs have prompted timber companies to continuously compress their own profits, and the weak demand in the downstream market has increased the operational pressure on timber companies.