Caixin Futures: Geopolitical Risks Dominate Crude Oil and Fuel Oil; Short-term Bullish Outlook for Glass and Soda Ash

⑴ In terms of crude oil, the third round of negotiations between the US and Iran took place this week. The Iranian side described the results as optimistic, while the US side was relatively dissatisfied, leading to market divergence. There will still be technical negotiations next Monday, and the geopolitical crisis has not been fully resolved. As a variety closely linked to overseas markets, it is necessary to closely monitor changes in the geopolitical situation. ⑵ Regarding fuel oil, domestic high-sulfur fuel oil has a high import dependency, with Iranian imports accounting for 20%, making it greatly affected by geopolitics. Strategically, it is advisable to go long on dips, but not to chase highs. ⑶ For glass, most downstream sectors have not resumed work after the Spring Festival, resulting in relatively sluggish spot transactions. News about dual control of energy consumption has triggered expectations of supply contraction for petroleum coke and coal-to-gas production lines. Coupled with the fact that the main contract's premium is not high, the "golden March and silver April" peak season expectations provide support, so a short-term bullish approach can be considered. ⑷ For soda ash, there has been little change in the supply and demand pattern after the holiday, with enterprises' facilities undergoing volatile adjustments and supply increasing. Upstream plant inventories have accumulated to a high of 1.89 million tons, and the basis remains at a discount. In the short term, a rebound may occur due to a relatively warm macro environment and can be viewed slightly positively, but mid-term supply pressure still exists, so the upside may be limited. ⑸ For caustic soda, the price of liquid caustic soda in Shandong has slightly increased, but post-holiday plant inventories have risen by 22.13% compared to before. Currently, enterprises have not triggered continuous production cuts, warehouse inventories remain high, and prices are still at a premium to spot, so the market is expected to mainly fluctuate at the bottom. ⑹ For methanol, spot prices have fallen, and weak supply and demand are suppressing the market. After the holiday, upstream inventories in inland areas need to be digested, and the scale of maintenance in March is not large for now, so the market has sufficient circulating volume. It is expected that the domestic methanol market will operate in a weak and volatile manner in the near term.