Caixin Futures: Broad Gains in the Energy and Chemical Sector, Crude Oil Remains at High Levels with High Volatility

⑴ In terms of crude oil, despite recent statements by Trump that the war may end soon and the G7 expressing support for the use of strategic oil reserves, the Hormuz Strait remains blocked, and crude oil supply continues to shrink. Today, the energy and chemical sector saw widespread gains, with tight supply concerns spreading for upstream major raw materials such as crude oil, naphtha, ethylene, and methanol. This has prompted petroleum and chemical companies to plan to reduce production loads, driving short-term market sentiment. ⑵ Considering that uncertainties remain in the Iran situation and that supply reductions from Middle Eastern oil-producing countries are unlikely to recover in the short term, prices are expected to remain high and fluctuate strongly. ⑶ Regarding fuel oil, Trump’s recent remarks about the war possibly ending soon triggered corrections in crude oil and fuel oil prices. However, domestic high-sulfur fuel oil imports remain highly dependent, with Iranian high-sulfur fuel oil accounting for 20% of domestic imports. The supply gap is difficult to recover in the short term, and prices are expected to remain high and fluctuate strongly. ⑷ In terms of glass, recently the overall shipment from Shahe market enterprises has been decent, market transactions are flexible, and some enterprises in Beijing-Tianjin-Tangshan have raised prices. The fundamentals for glass are not strong, with inventory accumulating again last week by 4.77%. Yesterday, a 1,050-ton production line in Shahe resumed operation, but the “Golden March and Silver April” peak season expectations provide some support for prices, which are expected to fluctuate and run strongly. ⑸ For soda ash, today the domestic soda ash market remained flat and stable, with prices mainly steady and new price transactions average. Some enterprises increased their production load, slightly increasing supply. Today’s operating rate is 85.39%, with stable operations. Monday’s inventory decreased by 24,500 tons. Today’s basis quotes: Hebei warehouse delivery 05-30 to 40, Shahe delivery 05 flat, Hubei warehouse delivery 05-10. ⑹ For caustic soda, today the Shandong liquid caustic soda market prices were locally stable, with low-concentration caustic soda moving on rigid demand, and high-concentration caustic soda exports still bullish, with no new export orders concluded. Tight supply concerns for upstream major raw materials for PVC, such as crude oil, naphtha, ethylene, and methanol, have spread, causing prices to remain high. Related chlor-alkali enterprises have already reduced or plan to reduce production loads, driving a broad rebound in chemicals, with PVC and caustic soda rising strongly. ⑺ Overall, the impact of geopolitics on chemical product supply has not yet subsided, but sentiment has fluctuated. The market is expected to be volatile, with a short-term bullish outlook. ⑻ For methanol, today’s spot price in Taicang is 2,625 yuan/ton, up 75 yuan; Inner Mongolia North Line price is 2,185 yuan/ton, down 25 yuan. Chemical futures rebounded strongly again today, with coastal port trading focus rising in tandem. Port inventories decreased by 130,700 tons, plant inventories decreased by 29,300 tons, and arrivals this week remain low (122,700 tons). ⑼ Overall, the international situation remains unstable, and methanol prices are mainly affected by macro sentiment. In the medium to long term, geopolitical conflicts will cause delays and reductions in methanol import sources, and methanol will enter a wide fluctuation phase.