China’s Commodity Prices Surge in March as Market Momentum Strengthens

China’s commodity market maintained a robust expansion in March, with prices rising significantly driven by recovering production, strong demand and external market factors, data from the China Federation of Logistics and Purchasing (CFLP) showed on April 5.

The China Commodity Price Index (CBPI) stood at 129.9 points in March, climbing 4 percent month-on-month and 14.5 percent year-on-year, both outperforming the same period last year, the CFLP announced. Among the 50 key commodities monitored by the federation, 38 saw month-on-month price increases, with diesel, methanol and ethylene glycol leading the gains by 30.5 percent, 30.4 percent and 29.3 percent respectively.

Broken down by sector, domestic energy and chemical prices surged sharply, affected by external factors including prolonged tensions in the Middle East and a sharp rise in international crude oil prices. The energy price index rose 16.5 percent month-on-month, while the chemical price index jumped 21.8 percent from the previous month.

Meanwhile, the domestic agricultural product price index edged up 2.8 percent month-on-month, boosted by higher international fertilizer prices and growing demand for biofuels, the CFLP data revealed.

Li Wei, an economist with the China Logistics Information Center, noted that the sharp rise in March’s index was a combined result of the recovering prosperity of China’s commodity market, the gradual emergence of policy effects and the sustained geopolitical tensions in the Middle East.

“As volatility in the international commodity market intensifies, uncertainties surrounding the import of energy, chemicals and other commodities are on the rise,” Li said. He added that it is necessary to further strengthen the assessment of external imported risks, expand raw material sources and the use of alternative resources, so as to enhance the ability to resist and respond to market fluctuations.

The data also reflected a steady recovery in enterprise production after the holiday and a sound release of market demand, which have further consolidated the foundation for the commodity market’s positive development.