On July 5, international oil prices suffered a slump, with Brent crude oil and U.S. crude oil falling by more than 10% during the session.
As of the close, the price of light sweet crude oil futures for August delivery fell below $100 a barrel and closed at $99.50 a barrel, a decrease of 8.24%; the price of London Brent crude oil futures for September delivery fell by 9.45%, It settled at $102.77 a barrel.
CCTV Finance reported that the slump in crude oil and weakening demand were mainly due to the fact that major central banks in Europe and the United States have tightened monetary policy to control soaring inflation. In the context of high energy prices, investors’ concerns about a recession in Europe and the United States have risen sharply.
That is to say, these investors generally believe that the major global economies will decline next, and the economic crisis may come.
Oil prices will fall to $65 a barrel, Affect the price of various chemical materials
1.Citigroup: Crude oil may fall to $65 a barrel
At the same time, Citigroup, which is influential in the field of global financial investment, also expects that oil prices will continue to plummet. “If the global economy slows to recession levels this year, Brent crude oil futures prices may drop to $65 a barrel by the end of this year. “.
Judging from the trend of the Brent crude oil price chart in recent years, the price of crude oil was relatively stable. After the outbreak of the epidemic, the price of crude oil plummeted in March 2020 to around US$30/barrel, and then soared all the way to close to Around $130/barrel.
However, in the context of the U.S. interest rate hike and the overall economic downturn, crude oil prices may have reached their peak and will fall month by month in the next few months.
2. Crude oil prices affect the prices of other chemical materials such as synthetic rubber
“Crude oil” is the “blood of industry”. Hundreds of useful substances in daily life are extracted from crude oil. Petrochemicals can produce hundreds of chemical products, such as plastics, synthetic fibers, synthetic rubber, synthetic detergents and many more.
If, as expected, the price of crude oil continues to fall in the next month, the price of synthetic rubber extracted from it may follow. Synthetic rubber is the main raw material of tires, and the price increase of synthetic rubber will affect the price of tires.
Moreover, in the entire production process of tires, the packaging paper and other things it needs are also closely related to the price of crude oil.
Natural rubber prices fluctuated and fell for half a year.There is still room for downside
According to historical experience, the tightening monetary policy of the United States, the gradual return of the global dollar to the United States, and the slump in crude oil indicate that global commodity prices will gradually fall.
As of today, the price of natural rubber is 12,610 yuan / ton, down 2.35%, down 305 yuan from yesterday. Moreover, from March 8 at the beginning of this year to July 6, rubber prices have been fluctuating and falling.
However, there are also research institutions predicting that the rubber bearish sentiment is pervasive, mainly because of the outbreak of the epidemic in many places in the first half of this year, and then as the domestic epidemic is contained, rubber prices are expected to achieve reasonable growth.
However, if the foreign situation is comprehensive, the Fed’s interest rate hike will have a certain impact on the rubber futures market. It is expected that natural rubber prices may still fluctuate and fall.
Raw materials fall, tire manufacturing costs fall. Tire price drop/disguised promotion
For the tire industry, the fall in the prices of bulk commodities such as oil and rubber will also reduce the manufacturing costs of tire companies and increase their profits, while the price of tires will return to the normal price range.
In the tire market, prices are also beginning to fall. From March to May this year, dozens of tire price increase notices will be sent out every month, but after entering June, the number of price increase notices from enterprises is getting less and less.
Moreover, according to the tire market research data released by “My Tire Network” in June, many stores even adopted “disguised price cuts” to sell tires, including promotions, buy gifts, and spike activities.
For example, in terms of passenger car tires, the wholesale price of some products in the southwest area of Dunlop has been slightly reduced by 5-8 yuan per piece; the Giti factory has launched 618 promotions for retail channels through the “Win Together” APP, and some agents have simultaneously designated products to give special prices Or the amount of promotion, the wholesale price fell 15-49 yuan / piece.
In terms of commercial vehicle tires, the Hankook East China market has dropped 30 yuan per tire this month after a sharp increase in prices last month.
In view of the above-mentioned economic downturn, the plummeting prices of raw materials, rubber and oil, coupled with the sluggish market sales, it may be difficult for tire prices to rise in the second half of this year.
Perhaps, for the current tire market, the impact of rising or falling tire prices on the market is less obvious because there is no demand at all.
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