Caixin Futures: Crude oil fluctuates at high levels, fuel oil and bitumen remain strong, while glass and soda ash operate at low levels

⑴ In the energy and chemical sector, crude oil and methanol are experiencing high-level volatility; fuel oil and asphalt are in strong oscillation; glass and soda ash are fluctuating at low levels; caustic soda shows a bearish trend.⑵ For crude oil, stimulated by Middle Eastern media reports claiming the US and Iran have reached the final draft of an agreement, international crude prices experienced a “dramatic plunge” during the US afternoon session yesterday, sparking concerns over eased geopolitical tensions. However, later these reports were refuted as fake news. Additional market information notes that three very large oil tankers passed through the Hormuz Strait, and US Energy Information Administration data showed substantial decreases in crude oil and gasoline inventories. Tight supply and expectations of smooth passage through the strait are influencing the market. Short-term, both sides are making frequent statements and news remains volatile, so crude oil is expected to fluctuate at high levels; a light position in the price range is recommended.⑶ In fuel oil, during US-Iran conflicts, Middle Eastern infrastructure and oil facilities were attacked, oil-producing countries cut output, while domestic reliance on high-sulfur fuel oil imports remains significant. US-Iran negotiations are now stalemated, and lately Russian fuel oil exports have also been disrupted. On the demand side, fuel oil for power generation is in its peak season, ship detours are increasing marine fuel demand, and fundamentals for fuel oil are favorable. However, shipping data shows three supertankers have passed through the strait, making the marginal news slightly bearish. Short-term, gradually take profits on long positions; overall, view the market as fluctuating.⑷ For asphalt, the price of Shandong 70# heavy-duty asphalt is 4430 yuan/ton, unchanged from the previous period. Rainfall has hindered rigid demand, but cost support remains strong. Refineries are operating at a loss and lack operating enthusiasm, so supply continues to tighten.⑸ Concerning glass, the North China market is generally stable with moderate transaction volumes; downstream buyers are cautious, mainly purchasing when prices dip. The current industry daily output is 145,100 tons. Compared with last week, upstream inventory has increased by 44,000 heavy boxes, a week-on-week rise of 0.06% and a year-on-year increase of 12.82%. Market news indicates Hubei held a special meeting to advance central rectification issues in the flat glass sector, possibly involving switching petroleum coke production lines to natural gas feedstock. Low supply is providing some support for prices, energy price hikes are pushing costs higher, but expectations remain weak and mid-term supply-demand pressure persists; subsequently, expect a wide range of low-level volatility.⑹ For soda ash, the domestic market is stabilizing with prices fluctuating within a narrow range and remaining relatively firm. Some companies are undergoing maintenance, resulting in a slight decrease in output. Today, the soda ash capacity utilization rate is 76.93%. On Thursday, the total inventory of domestic soda ash manufacturers was 1.776 million tons, down 19,300 tons from Monday, a decrease of 1.08%. Currently, basis prices are quoted as follows: Hebei warehouse pickup 09-60, Shahe delivered 09-30 to 40, Inner Mongolia plant pickup 09-310 to 350. Mid-term, large capacity additions are anticipated, making the outlook bearish; given recent bullish news in downstream glass, soda ash may follow with a slight rise, but intraday volatility is intense. Operate with a volatility strategy and consider buying the glass-soda ash price spread when prices drop.