Caixin Futures: Middle East conflict drives up oil product costs, chemical products show divergent trends

(1) In terms of crude oil, the ongoing confrontation between the US and Iran has led to decreased traffic through the Strait of Hormuz, tanker attacks, the shutdown of Saudi Arabia’s largest refinery, and rising oil and gas delivery costs. Although the US has promised insurance guarantees and escort services, ships are voluntarily halting operations at ports. The supply side of SC crude oil and downstream petroleum products is directly impacted, maintaining strong momentum. Close attention should be paid to developments in the situation. (2) Regarding fuel oil, domestic dependence on high-sulfur fuel oil imports is high, with Iranian imports accounting for 20%. The supply gap, combined with rigid demand for marine fuel in the Middle East, is driving a strong upward price trend. (3) For glass, downstream processing plants are gradually resuming operations, with procurement mainly driven by rigid demand from mid- and downstream sectors, resulting in sluggish transactions. The fundamentals are not strong, but commodity sentiment remains robust, supported by seasonal expectations and policy windows, and prices are expected to fluctuate. (4) For soda ash, enterprises are operating with volatility, production is increasing, and supply is ample. Downstream demand is average, with a strong wait-and-see attitude and moderate low-price transactions. The short-term macro outlook is warm, but mid-term supply remains high, with limited drivers, so price movements are expected to be volatile. (5) For caustic soda, high spot prices are not seeing good transactions, and with new production capacity coming online, inventory accumulation is expected to continue. Prices are still at a premium to spot, and the market is expected to remain at the bottom with fluctuations; attention should be paid to warehouse receipt pressure. (6) For methanol, spot prices are volatile, weekly factory inventories are increasing, and port inventories are slightly decreasing. Geopolitical conflicts will inevitably cause delays and reductions in imported supplies, supporting a phase of bullish market prices, with short-term prices remaining high and highly volatile.