Caixin Futures: Geopolitical Expectations Fluctuate as Methanol Retreats from Highs, While Crude Oil and Fuel Oil Maintain Strong Volatility

⑴ Crude oil is fluctuating at a high level. The US continues to bomb Iran and maintains a maritime blockade; the strait remains closed. The Houthi forces have announced a maritime ban on Saudi Arabia, posing threats to navigation in the Red Sea. The conflict between both sides is escalating with no reversal in sight. The situation is unlikely to cool significantly in the short term, so petrochemical products may continue to swing at high levels in the short run.⑵ Fuel oil is fluctuating at high levels. The US has taken actions against Iran in response to merchant ship attacks, with geopolitics once again fueling a rebound in fuel oil. Previously, the market had priced in the escalation conservatively, but with the US blocking the Strait of Hormuz once more, short-term supply constraints have intensified. Expect fuel oil to continue high-level swings in the short term.⑶ Asphalt is fluctuating at high levels. Today, the price of Shandong 70# heavy-duty asphalt is 4,385 yuan per ton, unchanged from yesterday. Geopolitical conflict has led to a surge in crude oil, with refineries enjoying obvious cost support. Most refineries are raising offers or limiting shipments. In August, local asphalt refineries in China planned total output of 870,000 tons, an increase of 154,000 tons from the previous month, up by 21.5%.⑷ On inventory: As of July 20, 54 domestic asphalt sample plant inventories totaled 782,000 tons, an increase of 1.0% from July 16 and up 3.9% year-on-year; social inventories (across 104 warehouses) totaled 992,000 tons, a decrease of 1.2% from July 16 and down 46.6% year-on-year. Both supply and demand of asphalt are weak, with low inventories. The simmering US-Iran situation remains the main trading logic. Asphalt is expected to fluctuate at high levels in the short term.⑸ Glass: bearish outlook. Some prices of small panels in Shahe have been cut; companies have mixed sales, with transactions mainly at low prices and demand lukewarm. Downstream buyers are supplementing as needed. Last week, float glass inventories were at 76.107 million weight cases, up 107,000 cases or 0.14% week-on-week, and up 17.2% year-on-year. Technological upgrades have raised costs, so supply remains low, but demand expectations are weak. Mid-term supply and demand pressures persist, and prices are expected to fluctuate with a bearish bias.⑹ Soda ash: bearish outlook. The domestic soda ash market is choppy, prices are stable, and trading atmosphere is moderate. Production is stable, maintenance expectations are low, and supply remains high, with capacity utilization at 80.67%. This week, manufacturers' total soda ash inventory was 1.7723 million tons, up 17,900 tons or 1.02% from last Thursday. High supply and weak demand are hard to change mid-term, so prices are expected to fluctuate with a bearish bias.⑺ Methanol: reduce long positions. Today, Taicang spot price was 2,705, down 75; North Line Inner Mongolia price was 2,342.5, unchanged. At the start of the week, methanol futures and spot prices rose sharply, with escalating geopolitics driving a rally in commodities. However, after Iran stated that an intermediary had proposed a 10-day truce, geopolitical expectations subsided. Port inventory is at 401,500 tons, down 45,200 tons week-on-week; sample producers' inventory at 380,900 tons, down 10,900 tons. Fundamentals remain strong, but with prices approaching resistance areas, high-level volatility may intensify.