Caixin Futures: US-Iran Mediation Fails, Crude Oil Remains High, Methanol Supported by Expected Import Reduction

⑴ Crude oil remains volatile at high levels as US-Iran tensions persist. On Thursday, Iran rejected a proposal transmitted by Trump via Iraq, failing to achieve mediation results. The US has demands to strike Iran's nuclear facilities. Houthi forces have attacked a Saudi oil tanker, threatening navigation in the Red Sea. In the short term, the situation is unlikely to cool significantly, and petrochemical products may continue to experience strong volatility near current highs. ⑵ Fuel oil fluctuates at high levels. The US has taken action against Iran in response to merchant ship attacks, causing renewed geopolitical tension and driving a rebound in fuel oil. Previously, the market was relatively restrained in pricing in further escalation; however, with the US re-blockading the Strait of Hormuz, supply constraints have been significantly heightened in the short term. A high-level volatility approach is recommended for the near future. ⑶ Asphalt remains volatile at high levels. Today, the price for Shandong 70# heavy traffic asphalt is 4,415 yuan per ton, up 35 yuan from the previous period. International crude oil hovering at high levels supports the cost side, but increased supply and weak demand are putting some pressure on the market. In August, total domestic asphalt output from independent local refineries reached 870,000 tons, an increase of 154,000 tons or 21.5% from the previous month; this week's capacity utilization rate was 21.3%, up 0.9% week-on-week. ⑷ In terms of inventory, as of July 23, inventory at 54 domestic sample asphalt plants was 783,000 tons, up 0.1% from July 20 and up 8.3% year-on-year. Inventory at 104 commercial warehouses was 992,000 tons, unchanged from July 20 but down 46.6% year-on-year. Both supply and demand for asphalt remain weak with low inventories, and the main trading logic is driven by escalating US-Iran tensions, so short-term volatility is expected to remain at high levels. ⑸ The glass market is expected to remain range-bound at low levels. The Shahe market is generally stable, transactions are average, market prices are flexible, and most participants are buying on dips. Weekly float glass inventories are 75.29 million weighted boxes, a decrease of 817,000 from the previous week (down 1.07%), but up 21.64% year-on-year. Current daily output is 142,800 tons. Technological upgrades have raised costs, keeping supply low. Recently, new production line cold repairs have supported a short-term rebound, but weak demand expectations persist and medium-term supply-demand pressure remains. The market is expected to continue to fluctuate at a low level. ⑹ The soda ash market remains bearish. Today, prices fluctuated but remained stable, with flexible transactions. Lianyungang Soda Ash Industry's utilization is gradually increasing, bringing higher supply, with daily output reaching 110,300 tons. Short-term enterprise maintenance plans remain limited, with a few companies planning maintenance in August. ⑺ Methanol long positions are being reduced. Today, Taicang spot price was 2,740, up 2; north line Inner Mongolia price was 2,370, up 12.5. This week, methanol spot prices have fluctuated higher, mainly due to expectations of lower imports from geopolitical factors. Inventories at inland companies are low, and downstream buyers are appropriately restocking, providing market support. Producers' inventories are at 350,300 tons, down 30,600 tons from last period; port inventory is 548,700 tons, up 147,200 tons from last period. Recently, import supply remains high, with both demand and supply constrained, so volatility at high levels for methanol may intensify.