| Investigation and Analysis on Supply and Demand of 300 Major Production Materials in the First Half of 2006 |
| Thursday,February 16,2006 Posted: 14:31 BJT(0631 GMT) MOFCOM |
At the end of Dec. 2005, the Ministry of Commerce organized administrative departments of commerce at all levels, major production and circulation enterprises, relative industrial associations and experts investigated and analyzed the Supply and Demand of 300 major production materials in the first half of 2006. Supply and demand investigation indicates that among 300 major production materials in the first half of 2006, 68 will be oversupplied, accounting for 23% and up by 4.6% compared with the second half of 2005, 218 will be balanced, accounting for 72.75 and up by 2.4%, and 13 will be in short supply, accounting for 4.3% and down by 61.5%. By categories, supply at markets of construction material, electromechanical products, automobiles, ferrous metal, materials of light industry and textile, production material of agriculture and chemical products will be abundant, and most of products will be balanced, and supply even exceed demand. Products of short supply and unable to meet demand will be mainly energy resources, nonferrous metal and lumber. Research on price tendency shows that 11.3% questionnaire believe that price will maintain rising, down by 3.2% compared with the second half of 2005 and price of 69.7% investigated products maintains steady, up by 4.5%, and of 19.1% fall down, decreasing by 1.3%. Compared with other fields, questionnaire believing that price will go up mainly focuses in areas of energy resources, lumber and ferrous metal, and believing that price will be down are in nonferrous metal, automobiles and construction materials. steadily, general relations between supply and demand of production material will maintain balanced and market price turn a momentum of steady decrease. A harsh supply and demand crisis on part of basic resources and raw material markets will be improved but resources products will be under the situation of a tight balance. Analysis indicates that in 2005, with the effect of various national macro control and measures, capacity of utilizing international and domestic markets and resources to balance market were upgraded, contributing to the sustainable and rapid development of Chinese economy. Industries with weak basis were enhanced, over investment in products with characters of high energy consuming and pollution intensity and overheated real estate were restricted. A big increase at production materials market were retrained, conflict between supply and demand of some resources were eased up and rising of market price turned to slow down. Total sales value of production materials in 2005 amounted to RMB14.3 trillion, up by 16.2% calculating at constant prices, the increase rate was down by 2.8% compared with 2004. General price level of production materials market in circulation was up by 2.9% compared with 2004 and increase rate was down by 10.7% on a year-on-year basis. Analysis indicates that in the first half of 2006, Chinese economic development will keep a rapid growth and provide space for the steady development of production materials market. 1, World economy will maintain a momentum of a steady increase, and China’s national economic development is facing with a better international environment. 2, Income of urban and rural households will go up steadily and domestic demand for consumption will remain hi-speed increase. 3, Investment will keep a steady growth. 4, International and domestic markets and resources will integrate closely into each other, internationalization of market allocation will be more remarkable and imports and exports keep a rapid increase. It is predicted that market price of production materials in the first half of 2006 will rise by 1% on a year-on-year basis. But considering the big base of market price in the first 4 months of 2005, the price at the beginning of 2006 will drop by a small margin and will be steady in the second quarter. There are still unfavorable factors in the process of development of production materials market in the first half of 2006 and we should attach much more importance to it and prepare well the countermeasures to minimize the influence of unsteady and unhealthy factors. 1, There are many uncertain factors in international supply and change of price of crude oil. 2, There are more uncertain factors in international economic environment. 3, Production capacity of part of industries is excess, causing severe price competition. 4, Emergency events and speculation may affect the stability of market. Compared with the second half of 2005, characters of price, supply and demand tendency of major production materials in the first half of 2006 are the following: 1, Supply and demand of resources products market will maintain changing for the better and price keep at a higher level. Supply and demand of coal market will maintain changing for the better with the ending of winter and weak demand for major industries of energy consuming. Market price will fluctuate steadily and by a small margin affected by seasons, transportation and costs. Demand at the finished oil market will keep enlarging, domestic production will maintain a low-speed growth owing to limited resources, the high price of oil at international market may not recover essentially within a short period, and status of strain on relations between supply and demand will be remained, domestic market price will maintained at a high level. 2, Ferrous metal will develop to the direction of supply exceeding demand, but price fall slightly. Demand for steel will keep increasing with certain speed. Owing to the utilization of newly added production capacity of domestic steel, situation of supply exceeding demand will be worse, and market price of steel will be at the lower level and fell slightly. But because of high production cost of steel, the market price will be down within a limited scope. 3, Supply and demand of automobile market will go up steadily, but price be down. In the first half of 2006, investment will flow into new projects of Chinese automobile industry, market demand will increase steadily, market competition tend to be intensive and automobile price maintain a tendency of decrease and stability. Meanwhile, the issue of policy that the country encourages consumption of economical and environmental friendly cars will further promote market segmentation of automobile market. 4, Supply and demand of nonferrous metal market will turn from strain to balance, and price fluctuate at a high level. Influenced by the rising of market price of copper, demand for copper consumption will drop and supply and demand will change to be balanced, the market price will keep at a higher level after fluctuation. Affected by fast growth of production capacity in 2004, pressure of oversupply at electrolytic aluminum market will be heavy, but with the enhancement of self-discipline in the industry, output will slow down and outer environment will be improved, the conflict of supply exceeding demand will be alleviated. 5, Construction material market will keep balance between supply and demand and price remain low. Owing to the impact of sharp decrease of investment in fixed assets and real estate on construction market, demand at the market will be bigger and steady, and market price will remain low. 6, General supply and demand at chemical market will maintain balanced and price be comparatively steady. Supply of most of chemical products is abundant and able to meet the demand of economic development. Meanwhile, some products like natural rubber, supply of which was limited and price will further increase. 7, Supply and demand relations at agricultural production materials market will be strongly improved and price decreased steadily. With the ease of short supply of upstream resources of coal and phosphate, and implementation of control policies to stabilize price of agricultural materials, the general supply and demand relations at agricultural production materials market have a tendency of balance, supply will keep dropping step by step. Owing to the seasonal and regional difference of supply and demand of agricultural production materials in China, part of regions may have supply and demand crises in different period of the first half of 2006 affected by factor of transportation problems. (Source: Network Center of MOFCOM) |
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