China's Commodity Price Index Rises in March Driven by Multiple Positive Factors

Li Yan, an analyst at Shandong Longzhong Information Technology Co., Ltd., stated that the current price uptrend was mainly affected by the ongoing tension in the Middle East and the disrupted shipping in the Strait of Hormuz, with the sharp rise in international crude oil prices directly driving up domestic oil product prices. "The 30.5% month-on-month increase in diesel prices stems not only from the rising production costs of domestic refineries but also from the tight supply of raw materials and the decline in plant operating rates, leading to a phased tightening of market supply," she added.

Regarding chemical products, Yao Heng, another analyst at Shandong Longzhong, noted that the sharp rise in international crude oil prices had pushed up the production costs of domestic chemical products. Coupled with the expected decline in imports of some products, the domestic market faced a short-term shortage of supply, which in turn drove the prices of methanol and ethylene glycol up by 30.4% and 29.3% month-on-month respectively.

Zhou Xu, Vice President of the Commodity Branch of CFLP, commented that the sharp rise in the commodity price index in March was the result of multiple factors, including the recovery of domestic market prosperity, the continuous release of policy effects, and the tense geopolitical situation in the Middle East. "Compared with the trends in international markets, the fluctuation range of China’s commodity prices is significantly smaller, which fully demonstrates China’s institutional advantages, the advantages of a complete industrial system and the advantages of a super-large-scale market," he emphasized.

Mr. Zhou also pointed out that the current external environment was intertwined with uncertainties and instabilities, and some industries were facing great pressure from rising costs. In the face of the new situation, enterprises in related industries needed to further strengthen the research and control of external imported risks, expand raw material supply channels, increase the use of alternative resources, and continuously improve their ability to resist market risks.