The Zhitong Finance App learned that recently, the China Commodity Index (CBMI) for October 2023 (CBMI) surveyed and published by the China Federation of Logistics and Purchasing was 102.8%, down 0.8 percentage points from the previous month. The index declined after two consecutive months of rising. Among the various sub-indices, the supply index and the inventory index have both risen. The supply index has been rising for three consecutive months, and this month's increase has increased, while the sales index has declined since a year's high.

Judging from the changes in this month's index, September and October have always been the peak seasons for traditional consumption, but this year, after the “gold nine” became strong, the pace followed by “silver ten” slowed down, indicating that the domestic economy is still in the recovery process. There is not enough new demand after stock demand is released, and market demand has not continued to recover as expected. However, judging from the changes in the index, the current market demand is a decline in the expansion trend. This is mainly a high base effect brought about by the continued recovery in the previous few months. Domestic demand is still on a stable basis under the implementation of various policies to stabilize investment and promote consumption. However, with the overall decline in commodity prices, the profits of manufacturers have shrunk, but product production has not decreased, the growth rate of market supply is still accelerating, and there is an imbalance between supply and demand, so this month's market inventory volume began to rise after a lapse of four months. The decline in the index this month is due to both a high base value and seasonal factors, but it also shows that the current domestic commodity market, especially demand recovery momentum, is still insufficient.

Entering November, it is difficult for the fundamentals of the industry to improve substantially. Although infrastructure investment continues to gain strength, the real estate industry has not broken out of its decline. As the temperature drops, construction in the northern region will decrease, later demand will continue to shrink, and the contradiction between supply and demand will further intensify. It is expected that in November, the operating pressure on the domestic commodity market will increase markedly, and the overall focus on commodity prices will still shift downward. However, if overall commodity prices continue to weaken, the profits of manufacturers will be further weakened, which will have a certain impact on commodity production at that time.

Furthermore, in the fourth quarter, with the steady release of vitality within the market and further strengthening of economic stabilization policies, there is still a foundation for the domestic economy to stabilize and improve. Against the backdrop of favorable macroeconomic policies and declining commodity supply expectations, the China Federation of Logistics and Purchasing believes that the bottom support of the commodity market is strong, and there is limited room for overall price decline, while coal, refined oil products, and some petroleum-related products are expected to continue to rise or rebound due to their special fundamentals.

The supply growth rate continues to accelerate.In October 2023, the commodity supply index continued to rise. In that month, it rose 0.5 percentage points from the previous month to 103.9%. The index rose three times in a row to the highest level in nearly four months. Judging from the current situation on the commodity supply side, profit, demand, and expectations are the main drivers of enterprise production, resulting in slightly different commodity supply conditions. Beginning in August, with the arrival of the peak traditional consumption season and the recovery of the domestic economy and manufacturing industry, market demand continued to pick up, commodity manufacturers had good expectations for the future market, and production enthusiasm was rising. At the same time, the overall smooth operation of the logistics industry also enabled manufacturers to effectively guarantee the supply of raw materials to manufacturers, providing support for production enterprises, and commodity production began to rise. Most commodity production continued to rise this month. Production expectations for the future market continued to rise. Production enthusiasm is rising, and the overall commodity supply growth rate continues to accelerate. Among the major commodities, the supply of iron ore, coal, non-ferrous metals and automobiles continues to increase, and the growth rate is accelerating. Although the supply of steel and chemicals has increased, the growth rate has slowed due to contraction in corporate production profits. This month's refined oil products were affected by the overall decline in the operating rate of the main business and local refineries, and market supply declined for the first time since June 2022. The supply of iron ore, coal, non-ferrous metals and automobiles increased by 4.7%, 7.1%, 6.7% and 6.5% respectively from the previous month, and the growth rate was 3.0, 2.3, 1.9 and 1.9 percentage points faster than the previous month; the supply of steel and chemicals increased by 1.8% and 2.6%, respectively, from the previous month, and the growth rate decreased by 1.4 and 0.9 percentage points from the previous month, respectively; and the supply of refined oil products decreased by 3.1% from the previous month.

Sales growth is starting to slow down.In October 2023, the commodity sales index rose two times in a row before the end, and there was a pullback. That month fell 2.6 percentage points from the previous month to 102.8%, indicating that after the “Golden Nine” performance in the domestic commodity market, “Silver Ten” weakened, and the market sales growth rate slowed down this month. These are mainly: First, although the domestic economy is still recovering moderately, the driving effect of the real estate industry is weakening, demand has not shown explosive growth, and the progress of infrastructure projects has also slowed down. In particular, the real estate consumer market has frozen, and market confidence is slightly insufficient; secondly, the decline in high market prices has also inhibited the release of speculative demand. Terminal demand enterprises also mainly consume inventory, and the demand for stocking is low; finally, since the third quarter, the market sales volume has continued to increase, and the base is high, and this month's growth rate has also returned to normal. Among the major commodities, with the exception of a decrease in coal sales volume, other varieties are still showing an upward trend, but with the exception of steel, the sales growth rate of all other types has slowed down. This month's steel sales volume increased 6.3% from the previous month, and the growth rate was 2.2 percentage points faster than the previous month; sales of iron ore, refined oil products, non-ferrous metals, chemicals and automobiles increased 2.9%, 1.6%, 0.5%, 2.9% and 3.7%, respectively, from the previous month; the growth rate was 4.0, 5.0, 6.4, 2.9 and 2.2 percentage points lower than the previous month, respectively; this month's coal was affected by seasonal factors, and sales volume declined again after a lapse of four months, down 0.2% from the previous month.

Commodity inventories stopped falling and rebounded.In October 2023, the commodity inventory index stopped falling and rebounded to 101.0%, up 1.4 percentage points from the previous month, to the highest point in nearly eight months. Overall commodity inventory increased this month after four consecutive months of decline, indicating that as supply-side growth continues to accelerate, terminal demand has weakened, and market supply and demand are unbalanced. Commodity inventories have begun to backlog, and inventory pressure is showing. Judging from the inventory situation of major commodities, stocks of steel and iron ore continued to decline, while stocks of other varieties continued to increase, and the growth rate accelerated. This month's steel inventories fell 2.5% from the previous month, an increase of 1.9 percentage points from the previous month; iron ore inventories fell 0.9% from the previous month. In the face of increased supply, this month's decline was 1.8 percentage points narrower than the previous month; this month's inventories of coal, refined oil products, non-ferrous metals, chemicals and automobiles increased 4.4%, 3.2%, 3.8%, 4.1% and 4.2%, respectively, from the previous month. The growth rate was 1.9, 3.0, 3.4, 3.8 and 2.8 percentage points faster than the previous month.