Report Industry Investment Rating - The PVC industry is rated as "Oscillating" [5] Core Viewpoints - In 2026, PVC may continue to face inventory accumulation, but the magnitude will narrow, and the toughest period for the industry may have passed [3][71] - The cost side will provide a relatively solid bottom - support for PVC, but the overall oversupply situation remains, restricting the upward elasticity and space of PVC prices. The main operating range of the PVC main contract in 2026 is expected to be between 4,400 yuan/ton and 5,400 yuan/ton [3][71] - In the short term, the supply - demand contradiction before the Spring Festival is difficult to ease, and the post - festival spring centralized maintenance may be a key catalyst for the phased market [3][71] Summary by Directory 1. 2025 PVC Market Review - In 2025, the domestic PVC market was dominated by the core contradiction of increasing supply pressure and weakening demand, with the price center moving down again and hitting a record low in Q4. The main contract price ranged from 4,220 yuan/ton to 5,373 yuan/ton [12] - The market trend in 2025 can be divided into three stages: marginal improvement in H1 with price pressure from new capacity expectations; a strong rebound around July driven by policy expectations and coal price increases; and a return to fundamental pricing in Aug - Dec with increased supply and pessimistic export expectations [12][13] 2. Supply: PVC Industry Supply May Grow at a Low Pace in 2026 - **2.1 New Capacity Investment Pressure Will Significantly Ease in 2026** - In 2025, there was a small peak of new capacity investment, with a net increase of 220 tons/year and a capacity growth rate of about 7.4%. From January to November 2025, the total PVC output was 2,223.1 tons, a year - on - year increase of 3.6% [21] - In 2026, only Zhejiang Jiahua's 30 tons/year new device is planned to be put into production, with a capacity growth rate of only 1.0% without considering the elimination of backward capacity. There will be a structural vacuum period of new capacity investment from 2026 - 2027 [24] - **2.2 The Market Still Needs to Digest the Output Climbing Pressure of Previous New Capacities in H1** - New devices in 2025 were mostly put into production in Q3 and Q4, and their output contribution will be released in 2026. The market, especially in H1 2026, still needs to digest the real - world supply pressure [26] - **2.3 Low Profits Will Limit the Upward Elasticity of PVC Supply** - Under the long - term low - profit pattern, the number of eliminated and long - stopped PVC devices continues to increase. Since 2023, nearly 200 tons/year of capacity has been long - stopped or eliminated [29] - Currently, both single - product and chlor - alkali comprehensive profits of PVC are under pressure, but the industry maintains a high operating rate due to winter conditions. If profits do not improve, enterprises may increase maintenance in spring 2026, alleviating supply pressure [31][32] - Overall, in 2026, the PVC industry will shift to a new stage of optimizing and digesting existing capacity. With low profits, increased maintenance may offset the output climbing pressure in H1, and the output is expected to grow by about 2.5% year - on - year [36] 3. Domestic Demand: The Downturn in Real Estate Continues to Drag Down PVC Demand Recovery - In 2025, the real estate market was in structural adjustment pain. From January to November, the cumulative year - on - year decline in commercial housing sales area was 7.8%, new construction area was 20.5%, and completion area was 18.0%. The real estate industry will focus on high - quality development, and its recovery may take time, suppressing PVC demand elasticity, but the drag may ease [37] - In 2025, PVC downstream demand showed significant structural differentiation. Products highly related to construction, such as pipes and profiles, had low operating rates, while film products in consumer goods and other fields showed strong demand resilience [42] - In 2025, from January to November, the export volume of Chinese PVC floor coverings decreased by 10.9% year - on - year, affected by trade protectionism and the downturn in the developed countries' real estate cycle. In 2026, with the expected interest rate cuts in the US and Europe, PVC floor covering exports may improve marginally [46] - In 2025, from January to November, the apparent demand growth rate of PVC was - 1.8%, and the real demand growth rate was about - 1.2%. In 2026, PVC demand may end negative growth and be roughly the same as in 2025 [50] 4. Exports Will Be the Core Variable Affecting the PVC Supply - Demand Pattern in 2026 - In the context of weak demand, exports became an important way to digest domestic surplus PVC capacity. From January to November 2025, the cumulative PVC exports were 3.509 million tons, a year - on - year increase of 47.2%, and the export share increased from 11% to 16% [54] - **4.1 Removal of Trade Barriers in India** - India is still the largest single export market for Chinese PVC. From January to November 2025, the export volume to India was 1.421 million tons, a year - on - year increase of 14.2%. India's PVC demand has great growth potential, but domestic capacity expansion is restricted by raw material supply and power resources [56][57] - In November 2025, India removed the BIS certification and anti - dumping measures for PVC. Despite possible over - drawn short - term demand, exports to India are still expected to grow at a high rate [57] - **4.2 Comprehensive Growth in Non - Indian Exports** - While exports to India increased by 14.2%, its proportion in total exports decreased from 50.9% in 2024 to 40.5%. Exports to Southeast Asia, Central Asia, the Middle East, and Africa also increased significantly [63] - Overseas supply is constrained by slow short - term capacity release and the clearance of high - cost capacity. The current export growth is partly due to the "source substitution" effect of the low domestic price [63][64] - In 2026, exports will be a key variable for balancing the PVC supply - demand pattern. Although there are uncertainties in trade policies, exports still have room for growth, with an expected annual export growth rate of 20%. However, the "price - for - volume" model is fragile, and exports are more likely to play a "bottom - supporting" role [69][70] 5. Investment Recommendations - Based on supply - demand estimates, PVC may continue to face inventory accumulation in 2026, but the magnitude will narrow. The cost side will provide bottom - support, but the oversupply situation restricts price increases. The main operating range of the PVC main contract in 2026 is expected to be between 4,400 yuan/ton and 5,400 yuan/ton. Before the Spring Festival, the supply - demand contradiction is difficult to ease, and post - festival spring centralized maintenance may be a key market catalyst [71]

Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Views of the Report Based on the performance of various sectors in 2025, the report provides technical analysis and risk management guidelines for different sectors in 2026, emphasizing the need for refined and differentiated risk management strategies due to the significant differentiation in sector trends and price fluctuations [1][2][3][4]. 3. Summary by Directory 3.1. Non - ferrous Metals Sector - **2025 Review**: The prices of non - ferrous metals showed significant differentiation in 2025, with most rising but with different fluctuation paths. Volatility varied among different varieties, with lithium carbonate, polysilicon, and nickel having higher volatility [12]. - **Key Variety Technical Analysis Outlook**: - **Copper (SHFE)**: In the medium - to - long term, it is still in an upward trend, with the next long - term resistance expected between 100,550 - 101,040 yuan/ton. In the short term, the upward trend is not smooth, and there is a risk of adjustment within the range [28][33]. - **Aluminum (SHFE)**: In the medium - to - long term, it is in an upward cycle, but a strong trend requires a signal. In the short term, there is a lack of a strong upward signal, and there is a risk of short - term correction [39][45]. - **Lithium Carbonate**: In the medium - to - long term, it is in a bullish trend but lacks verification. In the short term, the sustainability of the upward channel needs further verification, and there is a risk of volatility [50][58]. - **Risk Management Guidelines**: In 2026, risk management should focus on "continuing trends but increasing volatility, with significant differentiation in variety strategies", using refined and differentiated strategies for different varieties [62]. 3.2. Black Metals Sector - **2025 Review**: The black metals sector showed an overall oscillatory pattern in 2025, with raw materials more volatile than finished products. Finished products such as rebar and hot - rolled coils were under pressure throughout the year, while raw materials such as iron ore, coking coal, and coke showed a pattern of falling first and then rising [67][68]. - **Key Variety Technical Analysis Outlook**: - **Rebar**: In the medium - to - long term, it is in a downward channel, and technical indicators show no signal of trend reversal. In the short term, it maintains low - level operation, and price fluctuations need attention [83][89]. - **Iron Ore**: In the medium - to - long term, it is in a triangular consolidation state, lacking technical indicator signals. In the short term, the center of the oscillation range moves down, and attention should be paid to the lower support range [94][100]. - **Risk Management Guidelines**: In 2026, risk management should establish the core of "uncertain overall trend but coexistence of structural risks and opportunities", implementing refined and differentiated strategies [105]. 3.3. Energy and Chemicals Sector - **2025 Review**: The energy cost side represented by crude oil declined throughout the year, dragging down downstream chemical products. There was significant differentiation among varieties, with high volatility in raw materials and building materials and relatively mild volatility in mid - stream chemical products [107][108]. - **Key Variety Technical Analysis Outlook**: - **Methanol**: In the medium - to - long term, the long - cycle trend lacks technical guidance, and there is still price volatility. In the short term, attention should be paid to rebound opportunities, but sustainability and strength need more trading days to verify [128][135]. - **PTA**: In the medium - to - long term, the downward trend is not completed, and its sustainability is uncertain. In the short term, there is upward repair momentum, and attention should be paid to price fluctuations near the resistance range [140][148]. - **Risk Management Guidelines**: In 2026, risk management should adopt refined management, mainly using interval band operations when the trend is unclear and continuously tracking factors affecting price fluctuations [152][153]. 3.4. Agricultural Products Sector - **2025 Review**: The agricultural products sector showed an overall oscillatory and weak pattern in 2025, with significant differentiation among varieties. Feed raw materials and some varieties showed a downward trend, while sugar showed independent oscillations [154]. - **Key Variety Technical Analysis Outlook**: - **Sugar**: In the medium - to - long term, there is still a risk of decline. In the short term, attention should be paid to the continuation of the downward trend [170][176]. - **Corn**: In the medium - to - long term, it is in a triangular consolidation state, and attention should be paid to short - term price opportunities. In the short term, the oscillation center rises, and attention should be paid to price fluctuations in the downward channel [180][188]. - **Risk Management Guidelines**: In 2026, risk management should abandon simple judgments on the overall direction of the sector and formulate differentiated strategies based on the technical forms and volatility characteristics of each variety [193].

Report Industry Investment Rating No information provided in the content. Core Viewpoints of the Report - In 2025, China's commodity options market entered a new stage of steady expansion, with 8 new varieties launched, increasing the total number of commodity options to 61. The market volume hit a record high, and the gap with the financial options market narrowed [1][14]. - The volatility of the commodity options underlying futures market increased, mainly driven by US tariff policies, domestic "anti - involution" policies, and the year - end precious metals market. This provided opportunities for volatility trading [2]. - In 2026, against the backdrop of high overseas policy games and slow domestic economic recovery, the pricing logic and volatility of the commodity market will show significant structural differentiation. Traders should construct refined and differentiated option strategy combinations according to different pricing logics [3]. Summary by Relevant Catalogs 1. 2025 Annual Overview of Commodity Options Market Transactions - **Market Expansion and Perfection**: In 2025, 8 new commodity option varieties were launched, increasing the total from 53 to 61, improving coverage and industry depth. The listing rhythm was stable at first and then accelerated. The market development focus shifted from quantity growth to quality improvement and function deepening [10][11]. - **Volume Growth**: The annual trading volume of commodity options reached a record high. As of December 15, 2025, the cumulative market volume was 1.517 billion lots, a year - on - year increase of 42.43%. The growth was continuous throughout the year, and the trading demand was driven by the macro - environment and industrial cycle [14][15]. - **Structural Changes**: About 80% of the 49 comparable option varieties saw volume growth. The market focus shifted to precious metals and non - ferrous metals. The share of the precious metals sector increased from 14.87% to 34.65%, and that of non - ferrous metals from 11.52% to 27.98%. The shares of the agricultural and black metal sectors decreased slightly [18][21]. - **Market System and Opening - up**: The market maker system was comprehensively upgraded, and the opening - up pace accelerated. Multiple important commodity option varieties were opened to foreign investors, increasing the number of tradable varieties and enhancing the market's international influence [26][27]. - **Decline of the Over - the - Counter Market**: The over - the - counter commodity options market growth slowed down in 2025. From January to November, the cumulative nominal transaction amount was 2.21 trillion yuan, a year - on - year decrease of 15.62%. The decline was due to macro - demand suppression and industry - structural factors [30]. 2. Volatility: Macroeconomic and Market Sentiment Boost Commodity Volatility Levels - **Historical Volatility**: The commodity options underlying futures market showed a pattern of more declines than increases, wide - range fluctuations, and sector differentiation. The resonance of the commodity market was mainly driven by US tariff policies and domestic "anti - involution" policies. The historical volatility of the commodity index first rose sharply and then declined [36][42]. - **Implied Volatility**: In general, the implied volatility of precious metals and new - energy metals increased, while that of agricultural products decreased. Different sectors had different implied volatility characteristics and future trends. For example, precious metals' implied volatility showed a differentiated trend, and new - energy metals' implied volatility remained at a high level [44][51][54]. - **Trading Strategies for Historical and Implied Volatility**: Trading historical volatility aims to earn Gamma returns, which are related to the second - order change of option price with respect to the underlying asset price. Trading implied volatility aims to earn Vega returns, which are related to the change of option price with respect to implied volatility. Traders need to balance high Vega values and high implied - volatility elasticity [66][73][78]. - **Trading Strategies for Implied Volatility Term Structure and Skewness Structure**: The implied volatility of options is a complex surface that varies dynamically in the dimensions of strike price and expiration date. Traders can use term - structure arbitrage and skewness - convergence strategies to capture trading opportunities [80][82][85]. 3. PCR Sentiment Indicator - PCR includes volume PCR, open - interest PCR, and turnover PCR. The traditional correlation rules are partially verified, but the proportion of strongly correlated varieties is limited. When using PCR indicators, investors need to interpret them differently according to variety characteristics and combine them with other data for comprehensive analysis [87][88][95]. 4. Outlook for 2026 and Option Strategy Recommendations - **International Macroeconomic Environment Outlook**: In 2025, the global commodity market was affected by macro - trade policy adjustments. In 2026, although the trend of anti - globalization may solidify, policy volatility is expected to decrease. The focus of trade frictions will shift to key technology fields and strategic materials. The Fed's interest - rate policy, the US mid - term elections, and geopolitical risks are the key variables affecting the market [99][100][106]. - **Domestic Macroeconomic Environment Outlook**: In 2025, China's economy showed strong resilience, with GDP growth expected to exceed 5%. In 2026, the economy will focus on expanding domestic demand, stabilizing prices, and optimizing supply. Consumption, investment, exports, local finance, and the implementation of "anti - involution" policies are the key factors affecting the market [107][110][119]. - **Option Strategy Recommendations for Some Varieties**: For globally - priced commodities, strategies should focus on trends and volatility opportunities caused by external uncertainties. For domestically - priced commodities, strategies should focus on capturing certain returns and potential price - recovery opportunities in a low - volatility environment. For new - energy metals, strategies should balance long - term growth expectations and short - term high - volatility realities [120][121][127].

1. Report Industry Investment Rating - The rating for styrene is "Bullish" [1] 2. Core Views of the Report - 2026 may be a year of bottom - building and momentum - gathering for the pure benzene and styrene industry chain. The supply - demand growth rates of both pure benzene and styrene will slow down, with no prominent contradictions, and the narrowing space of the pure benzene - naphtha spread and styrene processing margin is limited, but there is no strong driver for long - term significant expansion. In the long run, the industry chain may gradually turn around after 2026 [1][2][3] 3. Summary According to the Directory 3.1 Transaction Mainlines Were Variable but Supply Pressure Persisted Throughout 2025, and the Pure Benzene and Styrene Industry Chain Operated Under Pressure - In H1 2025, the industry chain's trading mainline was to compress the valuation of pure benzene, with the BZN narrowing significantly and the styrene - pure benzene spread widening. The reason was the excessive import of pure benzene and the slowdown of small downstream growth, while styrene had low port inventory and unexpected supply disruptions. In H2, high production profits led to increased styrene supply, inventory accumulation, and the narrowing of the styrene - pure benzene spread. The core issue throughout the year was the large supply increment and elasticity in the industry chain [14][15] 3.2 Pure Benzene: Seeking Weak Recovery Possibilities 3.2.1 Supply Pressure from New Capacity Release Still Exists Next Year but Weakens Marginally Compared to This Year - In 2025, due to smooth new capacity realization and high import pressure, China's pure benzene supply increased significantly. From January to November, the domestic production was 21.87 million tons, a year - on - year increase of 6.6%; from January to October, the import volume was 4.61 million tons, a year - on - year increase of 34.9%; the total supply increased by 10.3% year - on - year. In 2026, the expansion of pure benzene capacity will slow down, with an expected new capacity of 1.755 million tons per year and a year - on - year growth rate of about 5% [18][20] 3.2.2 The Favorable Outlook of Co - products Makes It Difficult to Reduce Disproportionation Operation Rates - In 2025, the BZN dropped rapidly, but the pure benzene disproportionation operation rate did not decline significantly because of the support from PX. The PX supply - demand in 2026 is expected to be tight, with an estimated de - stocking of 650,000 tons throughout the year. The high - running PXN will push up disproportionation profits, and the pure benzene industry's operation rate may remain above 78% [23][25] 3.2.3 The Supply - side Variable Lies in the Import Link - In 2025, China's pure benzene imports increased significantly due to the lack of diversion in the US Gulf and weak European chemical demand. The total import volume is expected to exceed 5.5 million tons, with a year - on - year growth rate of over 30%. In 2026, the key variable in the supply side is still the import volume. The benchmark expectation for the import volume is in the range of 5.4 - 5.55 million tons, similar to this year. If the overseas capacity exit rhythm exceeds expectations, there may be a slight decrease [28][43] 3.2.4 Pure Benzene Demand: The Five Major Downstreams Will Shift from Differentiation to Convergence - In 2025, pure benzene demand maintained high - single - digit growth but was significantly differentiated. The apparent consumption growth rate was 9.11%, and the real demand growth rate was about 7.3%. In 2026, the overall demand growth rate of pure benzene may slow down to 5% - 6%, and the growth of different downstream demands will shift from differentiation to convergence [44][51] 3.2.5 Pure Benzene Summary: The Supply Growth Rate Will Slow Down Marginally, and the Probability of Weak Recovery of the Pure Benzene Pattern Is Higher - In 2026, the supply - side growth pressure of pure benzene will ease marginally. The expansion speed of petroleum benzene will slow down to about 5%, and the petroleum benzene output may be around 24 million tons. The import volume is expected to be in the range of 5.4 - 5.55 million tons. The growth of the five major downstream demands of pure benzene will shift from differentiation to convergence, with a weighted growth rate of 5% - 6%. The annual pure benzene is expected to accumulate 20,000 tons of inventory, and the inventory accumulation amplitude will narrow significantly compared to 2025 [65] 3.3 Styrene: The Processing Margin Is Expected to Repair Slightly, but the Slowdown of Demand Growth Rate Will Restrict the Upside Space 3.3.1 The Expansion Pace Begins to Slow Down. Can the Boom Cycle Reverse? - From 2012 - 2019, the new investment in China's styrene industry was limited, and the domestic supply could not meet the demand. After 2019, with the rise of private refining, the styrene capacity increased sharply. In 2026, only one new 700,000 - ton - per - year styrene plant of Northern Huajin is waiting to be put into production, and the capacity growth rate will slow down to 2.9%. The industry may be in a year of momentum - gathering, and the cycle reversal may still need to wait [68][69] 3.3.2 The Existing Capacity Still Needs Time to Be Digested - In 2026, the new plants of Guangxi Petrochemical and Jilin Petrochemical will fully realize the supply - side increment. If the non - integrated device profit turns positive for a long time and the industry's overall operation rate rises to 78% - 80%, the annual styrene output may reach 18.95 - 19.44 million tons, which requires a demand growth rate of 6% - 8%. To achieve a cycle reversal, the demand growth rate needs to reach over 10%. The exit speed of marginal capacity has slowed down [72][74] 3.3.3 The Probability of Continued High Growth Rate of Downstream ABS Is Not High - In 2025, the styrene demand increased significantly, with the apparent demand growth rate exceeding 12% and the real demand growth rate around 10%. The demand increment mainly came from the high - growth of ABS production. In 2026, the high - growth rate of ABS may not continue. Policy support may shift from durable consumer goods to service consumption and general consumer goods, and ABS may shift from the inventory - building cycle to the de - stocking cycle. The styrene demand growth rate in 2026 may slow down to the range of 3% - 5% [81][93] 3.3.4 Styrene Summary: More Patience Is Needed in the Momentum - Gathering Stage - In 2026, the styrene capacity growth rate will slow down to 2.9%, but the existing capacity still has a large release space in terms of output. The styrene demand growth rate may fall to the range of 3% - 5%. The non - integrated device profit only needs a slight repair to meet the downstream demand growth. The styrene processing margin may rise compared to this year, but 2026 will be a year of bottom - building and momentum - gathering rather than a reversal year [94] 3.4 Not Pessimistic in the Long Run, and the Long - term Inflection Point Is Approaching - In the long run, the pure benzene and styrene industry chain may gradually turn around. The capital expenditure has slowed down significantly, and the signal of the end of the supply - side expansion cycle is more obvious. The export of direct downstream and secondary downstream products may have a greater impact on the balance sheet. The demand for pure benzene and styrene is in line with China's industrial transformation and upgrading trend, and the medium - and long - term growth rate center is expected to be higher than GDP [97] 3.5 Investment Recommendations - In 2026, the trading of pure benzene and styrene is still difficult. It is recommended to try long positions at low levels after the market provides a safety margin to play for the expected difference. Based on Brent crude oil at $55 - 75 per barrel, the styrene price range to focus on is 6,000 - 7,800 yuan per ton. In the commodity dimension, the long - term allocation timing has not arrived, but in the equity dimension, it is recommended to pay attention to the allocation opportunities of targets with a relatively high proportion of aromatic hydrocarbon equity capacity [3][111]

1. Report Industry Investment Rating - TTF/JKM/HH: Bearish [1] 2. Core Viewpoints of the Report - In 2026, the US natural gas market will shift from balance to surplus as supply growth outpaces demand growth [2][21][22] - European natural gas demand lacks incremental drivers, with overall stable consumption due to the absence of extremely cold winters and high gas prices [3][60] - The Chinese natural gas market will remain in a supply - surplus pattern in 2026, though demand may grow slightly more than in 2025 [4][98] - In 2026, the global natural gas market is in a capacity expansion cycle, and major economies face insufficient endogenous consumption growth. Key benchmark prices will face downward pressure [5][116] 3. Summary by Relevant Catalog 3.1 2025 Natural Gas Market Review - The gas price trend in 2025 was generally in line with the previous forecast. Nymex had the highest volatility, and its price was pushed to a high of 5.4 USD/MMBtu in December [15] - Demand in major consumption areas was weak. Chinese demand shifted from high - speed to low - speed growth, European consumption was stagnant, and US total demand growth was dragged down by negative growth in gas - fired power generation [18] - Supply was in the commissioning cycle. North American LNG liquefaction capacity was released in 2025, and there was a structural adjustment in supply between Asia and Europe [19] 3.2 2026 US Natural Gas Market: From Balance to Surplus 3.2.1 US LNG Exports in 2026 - LNG exports will still lead US demand growth, mainly due to partial commissioning of Golden Pass and the ramp - up of Corpus Christi stage 3 [22] - In 2025, US LNG exports increased by 22 million tons, with a significant increase to Europe and a decline to Asia. The US has become highly dependent on the European market [28] - In 2026, US liquefaction capacity will further grow with the commissioning of Golden Pass's first two liquefaction lines, and PNG exports to Mexico will also increase [37][38] 3.2.2 Gas - Fired Power in the Future - In 2025, US gas - fired power generation decreased in the first three quarters, mainly due to the reverse substitution of coal - fired power caused by high gas prices and the repair of coal - fired power ignition spread [39] - Renewable power, especially photovoltaics, will increasingly squeeze gas - fired power. The future new gas - fired power installations will have limited impact on demand [40][41] 3.2.3 US Dry Gas Production in 2026 - US dry gas production is expected to continue growing in 2026, though the growth rate may be lower than in 2025. The growth is related to capital expenditure inertia and price expectations [50] 3.3 Global LNG Expansion and Russia - EU Energy Decoupling - European natural gas demand remains stable overall, with limited growth in the residential, commercial and industrial sectors. However, gas - fired power demand has increased, especially in Germany and Poland [60][61][62] - European natural gas supply has undergone significant structural adjustments. Further energy decoupling between Russia and Europe is feasible due to sufficient supply from North America and the Middle East. But Russian LNG may put pressure on the spot market [63] 3.4 More Russian Supplies to Asia Affecting the Spot Market - Chinese natural gas demand entered a low - growth stage in 2025, with industrial demand declining and gas - fired power demand increasing. Supply from domestic production and pipeline imports has squeezed LNG imports [96][97] - In 2026, Chinese natural gas demand may grow slightly, but the market will still be in surplus. More Russian LNG flowing to Asia may depress the spot market price [98] - Japanese and South Korean gas demand has a limited impact on Northeast Asia, and overall Asian demand was weak in 2025 [99] 3.5 Investment Recommendations - In 2026, the main benchmark prices TTF, JKM, and HH will face downward pressure. TTF/JKM volatility will be significantly lower than Nymex, making Nymex more valuable for trading. The Nymex price may fall below 3 USD/MMBtu in 1H26 [5][116]

Report Industry Investment Rating - The report gives a bullish rating for lithium carbonate [1] Core Viewpoints of the Report - In 2026, the global lithium resource market will show a pattern of high growth in both supply and demand, with a static surplus of about 112,000 tons of LCE. However, due to the low inventory levels in each link and the high growth in demand, there may be short - term mismatches, and the industry is expected to be in a tight balance. It is recommended to shift the overall strategy from wide - range fluctuations to long - term long positions on dips, with the lithium carbonate main contract expected to trade in the range of 80,000 - 150,000 yuan/ton [2][3][114] Summary by Relevant Catalogs 1. Market Review - In 2025, the lithium carbonate market showed a V - shaped trend. It bottomed out under pessimistic expectations and rebounded due to short - term supply - demand mismatches. The price fluctuated significantly, starting from 75,000 - 82,000 yuan/ton at the beginning of the year, dropping to a low of 58,000 yuan/ton in the middle of the year, and then rebounding to around 120,000 yuan/ton recently [15] 2. Supply Side 2.1 Resource End - In 2025, the global lithium resource output was about 1697,000 tons of LCE, with a year - on - year growth rate of 31%. Australia's spodumene and South American salt lakes were the main sources, and the increase was mainly due to the expansion and production ramp - up of projects such as Pilbara's P1000, SQM's Atacama, etc. In 2026, it is expected to be a year of concentrated production increase, with an estimated output of 21.8 million tons of LCE, a year - on - year increase of 480,000 tons of LCE, and a growth rate of 27.3%. China, Argentina, Australia, and Africa will contribute the main increments [19][20] 2.2 Lithium Salt End - In 2025, the output efficiency of domestic lithium salt plants was affected by resource tightness, and the profit of the spodumene processing end was difficult to expand significantly. The total inventory days of domestic lithium concentrate dropped to a low level, about 2.6 months. From January to November, the domestic output of lithium carbonate was 871,000 tons, a year - on - year increase of 44%, and the output of lithium hydroxide was 276,000 tons, a year - on - year decrease of 16.5% [43][45][54] 2.3 Lithium Salt Import - From January to November 2025, China imported 219,000 tons of lithium carbonate, a year - on - year increase of 6%. Chile and Argentina were the main import sources. Chile's exports of lithium salts to China decreased, but the export of lithium sulfate increased, offsetting part of the decline. In 2026, the export volume of Chile and Argentina is expected to increase, but the proportion of exports to China may decline slightly [56][57] 3. Demand Side 3.1 New Energy Vehicles - In 2025, the production and sales of new energy vehicles in China increased significantly, with a penetration rate of about 47% throughout the year. Pure - electric vehicles accounted for about 65%. In 2026, affected by the reduction of purchase tax subsidies, the growth rate of power demand will be restricted, but policies such as trade - in subsidies will provide support. It is estimated that the global sales of new energy vehicles will reach about 23.78 million in 2026, a year - on - year increase of 13%. The global power cell consumption is expected to reach 1600GWh, a year - on - year increase of 25% [2][64][84] 3.2 Energy Storage - In 2025, the 136th document promoted the market - oriented development of the energy storage industry. The domestic energy storage industry showed strong growth, and overseas markets also had high growth rates. It is estimated that the global new energy storage installed capacity will reach 110GW/330GWh in 2026, a year - on - year increase of 27.9%/47.6%. The lithium salt demand will reach 553,000 tons of LCE, a year - on - year increase of 46.6% [90][102][103] 3.3 Material Factories Actively Replenish Stocks, and Terminal Inventories Remain at a Low Level - In 2025, the inventory of downstream materials and cells remained at a low level. The inventory turnover days of LFP cathode materials were about 0.8 months, and the inventory days of ternary materials increased to nearly 1.5 months. The inventory days of power and energy storage cells decreased to 1.2 and 0.7 months respectively at the end of 2025. In 2026, the low inventory level will support the apparent demand for lithium salts [105] 4. Supply - Demand Balance and Investment Suggestions 4.1 Supply - Demand Balance Sheet - In 2025, the surplus of lithium resources was about 48,000 tons of LCE. In 2026, the global static surplus is estimated to be about 110,000 tons of LCE, and the domestic lithium carbonate supply will be slightly surplus by 10,000 tons, showing a tight supply - demand balance [114][117] 4.2 Investment Suggestions - It is recommended to shift the overall strategy from wide - range fluctuations to long - term long positions on dips. The operating range of the lithium carbonate main contract in 2026 is expected to be 80,000 - 150,000 yuan/ton. For arbitrage, continue to focus on the arbitrage opportunities between the warehouse receipt cancellation month and the adjacent contracts, and after the listing of lithium hydroxide, there will be more cross - variety arbitrage opportunities [3][121][122]

1. Report Industry Investment Ratings - **Foreign Exchange Futures (US Dollar Index)**: Short - term shock [12] - **US Stock Index Futures**: Expected to run with a slight upward bias in a volatile manner [13] - **Stock Index Futures**: The Shanghai Composite Index is expected to hit 4000 points in the short term, and it is recommended to evenly allocate long positions in various stock indices [3][15] - **Treasury Bond Futures**: Long - term bonds are expected to turn from shock to rise, and it is recommended that allocation investors buy when interest rates rise, and trading investors buy on dips and exit quickly [17][18] - **Agricultural Products (Soybean Oil/Rapeseed Oil/Palm Oil)**: Palm oil has completed bottom - building, and it is recommended to consider going long after referring to December supply - demand data [19][20] - **Black Metals (Steam Coal)**: Coal prices are expected to continue to decline in the short term [21] - **Black Metals (Iron Ore)**: The short - term fundamentals are under pressure, and it is expected to be in a weak shock [22][23] - **Non - ferrous Metals (Lead)**: It is recommended to wait and see in the short term both for unilateral trading and arbitrage [24] - **Non - ferrous Metals (Zinc)**: In the medium term, it is recommended to pay attention to buying opportunities on pullbacks; for arbitrage, long - short spreads can continue to be held, and an internal - external reverse arbitrage strategy is appropriate [27] - **Non - ferrous Metals (Lithium Carbonate)**: The current fundamentals are weakening, pay attention to short - term correction pressure, and it is recommended to go long on corrections in the medium term [29][30] - **Non - ferrous Metals (Nickel)**: It is expected to return to a shock trend. If the RKAB quota is only 250 million tons, there will be significant upside potential [33] - **Non - ferrous Metals (Tin)**: The short - term supply tension has eased, and there is pressure on the unilateral upward movement of prices. Be wary of price drops when the capital boom fades [38] - **Energy Chemicals (Carbon Emissions)**: High short - term market risk [40] - **Energy Chemicals (Caustic Soda)**: The short - term supply - demand contradiction has eased, but there may be pressure to reduce prices to clear inventory in the future, and the rebound height is limited [44][45] - **Energy Chemicals (PVC)**: The supply - demand contradiction is difficult to be substantially resolved before the Spring Festival, and the short - term rebound pressure is high. In 2026, the supply - demand is expected to improve marginally [48] - **Energy Chemicals (Soda Ash)**: In the medium term, it is recommended to take a bearish view and go short on far - month contracts on rallies [50] - **Energy Chemicals (Float Glass)**: The glass fundamentals are still in surplus, and it is recommended to short on rallies in the medium term [51] 2. Core Views of the Report - Geopolitical risks are rising, with Israel warning of a possible strike on Iran, which may affect the short - term trend of the US dollar index [12] - The US plans to impose 301 tariffs on Chinese semiconductor products in 2027, but the macro environment is still favorable for US stocks in the short term [13] - The A - share market is rising, with the Shanghai Composite Index recording 7 consecutive positive days, and it is expected to hit 4000 points in the short term [3][15] - The central bank has carried out reverse repurchase operations, with loose funds in the short - term and short - term bonds strengthening. Long - term bonds are expected to turn from shock to rise [16][17] - The prices of some commodities are under pressure. For example, steam coal prices are expected to continue to fall, and iron ore prices are in a weak shock [21][22] - The supply - demand situation of some commodities is complex. For example, the supply - demand contradiction of PVC is difficult to be resolved before the Spring Festival, while the supply - demand of palm oil shows signs of improvement [19][48] 3. Summary by Relevant Catalogs 3.1 Financial News and Comments 3.1.1 Macro Strategy (Foreign Exchange Futures (US Dollar Index)) - **News**: Israel warns of a possible strike on Iran, and Ukraine uses British missiles to attack a Russian refinery [10][12] - **Comment**: The possibility of Israel attacking Iran has increased significantly, and geopolitical risks have risen. The US dollar index is expected to be in a short - term shock [12] 3.1.2 Macro Strategy (US Stock Index Futures) - **News**: The US plans to impose 301 tariffs on Chinese semiconductor products in 2027, and China has protested [13] - **Comment**: The market has digested key economic data, and the optimistic expectations for interest rate cuts and economic soft - landing are still strong. The macro environment is favorable for US stocks, which are expected to run with a slight upward bias in a volatile manner [13] 3.1.3 Macro Strategy (Stock Index Futures) - **News**: The new construction and renovation of old urban communities in the first 11 months have completed the annual plan [14] - **Comment**: The A - share market is rising, with the Shanghai Composite Index recording 7 consecutive positive days, and it is expected to hit 4000 points in the short term [3][15] 3.1.4 Macro Strategy (Treasury Bond Futures) - **News**: The central bank has carried out 177.1 billion yuan of 7 - day reverse repurchase operations [16] - **Comment**: The central bank's open - market operations have led to loose funds, short - term bonds have strengthened, and long - term bonds are expected to turn from shock to rise [16][17] 3.2 Commodity News and Comments 3.2.1 Agricultural Products (Soybean Oil/Rapeseed Oil/Palm Oil) - **News**: Malaysia's palm oil exports from December 1 - 25 increased by 1.6% month - on - month [19] - **Comment**: The palm oil market shows signs of supply pressure relief, and it is recommended to consider going long after referring to December supply - demand data [19][20] 3.2.2 Black Metals (Steam Coal) - **News**: The price of steam coal in the northern port market is running weakly [21] - **Comment**: Due to warm winter weather, demand is weak, inventory is high, and coal prices are expected to continue to fall in the short term [21] 3.2.3 Black Metals (Iron Ore) - **News**: The new construction and renovation of 2.58 million old urban communities have been started from January to November [22] - **Comment**: The short - term fundamentals of iron ore are under pressure, with expected decline in molten iron output and a weak shock trend [22][23] 3.2.4 Non - ferrous Metals (Lead) - **News**: The LME 0 - 3 lead is at a discount of $42.3 per ton, and the social inventory of lead ingots has decreased [23] - **Comment**: The supply and demand of lead are both weak, and it is recommended to wait and see in the short term [24] 3.2.5 Non - ferrous Metals (Zinc) - **News**: The LME 0 - 3 zinc is at a discount of $29.14 per ton, and the domestic inventory of zinc ingots has decreased [25] - **Comment**: In the short term, the fundamentals of zinc are less contradictory, and the price is mainly affected by the macro. In the medium term, zinc prices are likely to rise [26][27] 3.2.6 Non - ferrous Metals (Lithium Carbonate) - **News**: Some companies plan to carry out maintenance in January, which will affect the output of cathode materials [28][29] - **Comment**: The current fundamentals of lithium carbonate are weakening, pay attention to short - term correction pressure, and it is recommended to go long on corrections in the medium term [29][30] 3.2.7 Non - ferrous Metals (Nickel) - **News**: Zhefu Holding's nickel sulfate production line has been put into operation, and APNI plans to reduce nickel ore production in 2026 [31][32] - **Comment**: The market is skeptical about APNI's plan. The nickel price is expected to return to a shock trend, and there will be significant upside potential if the quota is only 250 million tons [32][33] 3.2.8 Non - ferrous Metals (Tin) - **News**: The US will not impose additional tariffs on Chinese chips in the next 18 months, and the LME 0 - 3 tin is at a premium [34][35] - **Comment**: The short - term supply tension of tin has eased, and there is pressure on the unilateral upward movement of prices. Be wary of price drops when the capital boom fades [36][38] 3.2.9 Energy Chemicals (Carbon Emissions) - **News**: The closing price of CEA on December 25 was 72.58 yuan per ton, up 5.36% [39] - **Comment**: The short - term market risk of carbon emissions is high [40] 3.2.10 Energy Chemicals (Caustic Soda) - **News**: The price of liquid caustic soda in Shandong is at a low level [41] - **Comment**: The short - term supply - demand contradiction of caustic soda has eased, but there may be pressure to reduce prices to clear inventory in the future, and the rebound height is limited [44][45] 3.2.11 Energy Chemicals (PVC) - **News**: The domestic PVC powder market price is in a range shock [46] - **Comment**: The supply - demand contradiction of PVC is difficult to be substantially resolved before the Spring Festival, and the short - term rebound pressure is high. In 2026, the supply - demand is expected to improve marginally [48] 3.2.12 Energy Chemicals (Soda Ash) - **News**: The inventory of soda ash manufacturers has decreased this week [49] - **Comment**: In the medium term, soda ash is recommended to be taken with a bearish view, and it is advisable to go short on far - month contracts on rallies [50] 3.2.13 Energy Chemicals (Float Glass) - **News**: The inventory of float glass manufacturers has changed little this week [51] - **Comment**: The glass fundamentals are still in surplus, and it is recommended to short on rallies in the medium term [51]

1. Report Industry Investment Rating The provided text does not contain information about the report's industry investment rating. 2. Core Views of the Report - In 2026, the commodity market will enter a period of high volatility and deep differentiation driven by macro - logic. Each commodity sector faces unique risks, including macro - policy changes, geopolitical issues, supply - demand imbalances, and policy uncertainties [167]. - The long - term bullish logic for gold remains intact, but in 2026, there are risks of short - term corrections due to factors such as "twin - peak inflation", delayed Fed rate cuts, and high risk premiums [16]. - Non - ferrous metals may see their price centers rise, but they are exposed to risks from macro - policy fluctuations, trade protectionism, and supply - demand mismatches [46]. - Black commodities will continue to face challenges of weak demand and oversupply, with the risk of a negative feedback loop [79]. - Energy and chemical products will struggle to re - balance due to long - term geopolitical risks, overcapacity, and weak demand [108]. - Agricultural products are in an era of increased production but face uncertainties in demand, policy interventions, and inventory and supply chain risks [138]. 3. Summary by Relevant Catalogs 3.1 Precious Metals: Risks in Safe - Haven Assets - **"Twin - Peak Inflation" and Monetary Policy**: Trump's tariff policies may lead to supply - side "twin - peak inflation". If inflation rebounds, the Fed may adopt a "Higher for Longer" policy, suppressing precious metal prices [17]. - **Fiscal Policy and Asset Rotation**: Fiscal expansion may trigger economic recovery expectations, leading to asset rotation from safe - haven assets to risk assets. The short - term economic boost from fiscal policies may reduce the attractiveness of gold [29]. - **Central Bank Buying and Investment Demand**: Central banks buy gold to hedge against dollar depreciation, but some may slow down or sell gold due to high prices. The shift from central bank buying to Western ETF investment funds increases market vulnerability [33][35]. - **International Political Risks**: Geopolitical risks are already priced into gold. If tensions ease, the risk premium may disappear. Trade frictions may also cause price fluctuations [41]. - **High Beta Trap in Silver**: Silver's price is more volatile than gold. If the manufacturing recovery is weak or gold prices fall, silver prices may decline more sharply [42]. 3.2 Non - Ferrous Metals: Macro - Policy and Supply - Demand Structural Contradictions - **Macro - Environment and Price Volatility**: Uncertainty in Fed monetary policy and dollar index fluctuations can directly impact non - ferrous metal prices. US trade protectionism may reshape trade flows and cause regional supply - demand imbalances [47][48]. - **Supply - Side Risks**: Supply shortages in copper mines, structural problems in aluminum mines, and slow capacity clearance in new energy metals are major risks. Resource nationalism also increases costs and supply chain risks [52][54][56]. - **Demand - Side Challenges**: Traditional demand from real estate and home appliances is weak, while emerging demand from new energy vehicles, photovoltaics, and AI may not meet expectations, leading to insufficient demand [60][64][70]. - **Inventory and Capital Risks**: Inventory mismatches and financial risks in the capital market can amplify price fluctuations. Low - inventory environments may lead to forced - liquidation events, and large - scale capital inflows and outflows can cause price bubbles and sharp corrections [74][76]. 3.3 Black Commodities: Pains in the Post - Real Estate Era - **Demand - Side Risks**: The real estate market remains a major drag on demand, while manufacturing demand may slow down, and the sustainability of steel exports is uncertain. Over - interpretation of demand resilience may lead to supply - demand imbalances [80][83][85]. - **Supply - Side Risks**: Global iron ore supply will shift from tight balance to oversupply in 2026. Double - coking coal and alloys also face supply - side pressures [89][96]. - **Policy and Macro - Level Risks**: The implementation of the "anti - involution" policy is uncertain, and fiscal and monetary policies may have a diminishing marginal effect. International rules such as CBAM and US trade policies also pose risks [98][99][101]. - **Profit Distribution and Negative Feedback**: The profit distribution in the industrial chain is distorted, and a negative feedback loop may occur, leading to a systemic price collapse [102][105]. 3.4 Energy and Chemical Products: Difficult Re - balance in a Geopolitically Fragmented World - **Geopolitical Risks**: Crude oil geopolitical risks are long - term and fragmented, leading to trade flow restructuring and cost increases. OPEC+ faces challenges in maintaining production cuts, and non - OPEC+ countries have limited capacity for production increases [109][113]. - **Demand - Side Constraints**: The logic of oil consumption has changed, and global economic factors such as trade frictions and high - interest rates limit energy demand. Shipping and logistics risks also affect energy costs and trade flows [119][125]. - **Inventory Risks**: Crude oil and chemical product inventories are expected to increase, suppressing prices and weakening the impact of geopolitical premiums. High - inventory situations in chemicals will become normal [132][135]. - **Policy Execution Risks**: The implementation of the "anti - involution" policy is uncertain, and without effective measures, capacity clearance in the chemical industry will be difficult [137]. 3.5 Agricultural Products: Increased Production Meets Uncertain Demand - **Supply - Side Risks**: Major agricultural products are expected to increase in production, leading to a global supply surplus. The soybean market is highly dependent on Brazil, and any local disruptions may have a global impact [138][139]. - **Demand - Side Risks**: Food, feed, and industrial demand for agricultural products are all weakening. Policy uncertainties in bio - fuels also affect industrial demand [143][144]. - **Policy Intervention Risks**: Sino - US trade relations and bio - diesel policies are major variables that can significantly impact the agricultural market [151][156]. - **Inventory and Supply Chain Risks**: High inventories of US corn and soybeans suppress prices, and supply chain risks from logistics and geopolitical factors can cause price fluctuations [164]. 3.6 Summary and Response - In 2026, commodity risk management should be more forward - looking, structural, and flexible, upgrading from price risk management to volatility management and risk - return structure optimization [167]. - For precious metals, maintain long - term bullish positions but use dynamic stop - profit mechanisms and options to manage risks [168]. - For non - ferrous metals, refine futures hedging and use options to protect against extreme risks [169]. - For black commodities, shift from hedging absolute prices to managing profits and use options to manage costs and risks [170]. - For energy and chemical products, use futures to manage geopolitical risks and options to manage volatility. Take advantage of price rebounds to lock in processing fees [171]. - For agricultural products, use futures for selling hedging and options to manage price fluctuations and input costs [172].

Report Industry Investment Rating - Crude oil: Volatile [1] Core Viewpoints - Supply-side still has some negative factors not fully priced in. High maritime inventories and OPEC+ idle capacity are key factors pressuring oil prices. Oil prices are expected to oscillate and bottom out while verifying the supply surplus. Global demand growth remains low. Low oil prices will accelerate the process of supply and demand finding a new balance, and oil prices are expected to show signs of a bottom reversal in H2 2026, with Brent crude expected to fluctuate between $55 - $80 per barrel [5] Summary According to the Table of Contents 2025 Oil Price Trend Review - Surplus Risk Continually Pressuring Oil Prices - In 2025, oil prices showed a volatile downward trend, with the average Brent crude price expected at $68 per barrel, a significant decrease of about $10 per barrel compared to the previous year. In early April, the US announced a reciprocal tariff policy, and OPEC+ unexpectedly accelerated exiting voluntary production cuts, worsening expectations for both supply and demand, causing the oil price fluctuation range to shift downward. In H2, as market concerns about the surplus intensified, the monthly spread gradually declined, and oil price volatility decreased compared to Q2. In Q3, tariff risks eased, and global onshore inventories did not accumulate significantly. Although OPEC+ continuously raised production targets, the surplus contradiction did not emerge during the peak demand season, and oil prices rebounded moderately. Since Q4, rising maritime crude inventories have intensified concerns about supply surplus, and the oil price center decreased significantly compared to the previous two quarters. Brent crude briefly fell below $60 per barrel at the end of the year. Geopolitical conflicts were frequent throughout the year, but without substantial supply losses, risk premiums mainly caused pulse-like oil price fluctuations [17] Geopolitical Conflicts Adding Supply Uncertainties, Limited Expectations of Supply Damage Russian Oil Procurement Facing New Obstacles, Attention on Establishing New Sales Channels - In 2025, Russia's oil supply remained resilient. Maritime crude oil exports averaged about 3.45 million barrels per day, a year-on-year decrease of 0.05 million barrels per day. Since July, due to attacks on refineries, Russia's crude oil exports were significantly higher than seasonal levels, but were expected to decline after November. Oil product exports decreased to the lowest level since 2021, averaging 2.25 million barrels per day in the first 11 months, a year-on-year decrease of 0.18 million barrels per day. Crude oil maritime exports were mainly to India, China, and Turkey, with volumes of 1.72 million, 1.19 million, and 0.32 million barrels per day respectively, all decreasing in November compared to the previous month. Oil product trade flows were more dispersed, mainly exported to Africa, Asia, and Turkey, with a small amount to South America [20] - In October 2025, the UK and the US successively announced sanctions on two major Russian oil companies, Rosneft and Lukoil, and their subsidiaries. On October 23, the EU passed the 19th round of sanctions against Russia. Before finding ways to avoid sanctions, buyers usually reduce purchases from sanctioned Russian entities. The market is concerned about the progress of Russia-Ukraine peace talks and has not priced in the scenario of the US fully restricting Russian oil exports, as it would lead to a significant increase in oil prices, contrary to the Trump administration's goal of maintaining low oil prices [22] - Russia's oil supply is concentrated in four major companies. In 2024, Rosneft and Lukoil's crude oil production was expected to be 4.88 million barrels per day, accounting for 46% of Russia's total production. Their combined crude oil exports were 1.7 million barrels per day, and oil product exports were 0.87 million barrels per day. Currently, Russia's top four oil companies have all been included in the US sanctions list. After Gazpromneft and Surgutneftegaz were sanctioned in January, their direct crude oil exports gradually decreased to less than 1%. Some new exporters entered the market, with exports exceeding 1 million barrels per day from October to November, indicating the market's ability to adapt to sanctions and maintain trade flows. It is expected that more Russian oil exports will be carried out by non-sanctioned entities or newly established exporters in the future [23] - India and Turkey are sensitive to US sanctions. India is one of the largest buyers of Russian oil, with Russian oil accounting for about 36% of India's total oil imports, and about 70% from sanctioned entities. After the US imposed a 25% tariff on India in July, some Indian state-owned refineries reduced purchases from Russia, but the reduction was small. After the EU and US upgraded sanctions, Reliance said it would cut Russian oil imports and cancel long-term contracts with Rosneft. Nayara refinery, which has mainly relied on Russian oil since being sanctioned by the EU in July, is expected to maintain imports of about 0.4 million barrels per day. It is expected that about 0.8 - 1 million barrels per day of supply needs to switch sellers. Although establishing new channels takes time and there is a short-term risk of supply reduction, the market generally expects that Russia-India trade flows will recover with the entry of new exporters [27] - Turkey imports about 0.3 million barrels per day of Russian oil, accounting for about 50% of its total imports, and about 80% from Lukoil and Rosneft. Turkey has also increased imports of diesel and other oil products from Russia since the Russia-Ukraine conflict. Turkey is also subject to the EU's 18th round of sanctions on oil product raw materials, so there is a high risk of a reduction in Turkish imports of Russian oil. A significant decrease in Turkish imports of Russian oil was observed in November [28] - China can absorb some sanctioned oil, but there are obstacles to adjusting trade flows, such as high logistics costs and low cracking profitability of certain oil types. The potential buyers of sanctioned oil are mainly independent refineries. Based on rough calculations of shipping data, the average known non-state-owned arrival volume at Shandong ports in the first 10 months of this year was about 2.15 million barrels per day, with sensitive oil arrivals totaling nearly 1.53 million barrels per day. If the group of Russian oil buyers continues to be restricted, the space for trade flow adjustment will be limited [30] Buyer Limitations and Reduced Transportation Efficiency Causing Floating Storage Inventory to Rise - Since September, floating storage inventory has been rising. As of the third week of December, the inventory of crude oil floating at sea for at least 20 days reached 56 million barrels, the highest since March 2023. Currently, floating storage is mainly composed of sanctioned oil from Iran and Venezuela, possibly due to buyers' lack of quotas at the end of the year and reduced transportation efficiency. With the increasing impact of EU and US sanctions on Russia, the volume of Russian crude oil in transit increased significantly in December, and there is a high possibility that it will turn into floating storage [33] - Iran's supply has been stable, with an average crude oil production of nearly 3.3 million barrels per day and an average export volume of 1.7 million barrels per day in the first 11 months, an increase of 0.12 million barrels per day compared to last year. The conflict in June did not have a continuous impact on Iran's supply. Although exports decreased slightly from June to August, they reached a new high of over 1.9 million barrels per day in September. However, the US has repeatedly expanded sanctions on Iranian oil buyers, ports, and shadow fleets, reducing transportation efficiency and constraining buyers' digestion capacity. The average arrival volume in China decreased by 0.32 million barrels per day compared to the previous year, leading to an increase in floating storage inventory. Compared to the floating storage level of about 70 million barrels in 2022, Iran's current floating storage inventory is nearly 32 million barrels, which may still increase. If buyers' digestion speed cannot improve, high floating storage inventory may restrain exports [34] - Venezuela's average crude oil production is 0.93 million barrels per day, slightly increased compared to last year, and its average export volume is 0.77 million barrels per day, an increase of 0.11 million barrels per day. The increase in Venezuela's floating storage inventory is related to the reduction in exports to the US. After the US government temporarily suspended Chevron's operating license in May, exports to the US were interrupted. Although exports resumed in August, they did not reach previous peaks. Tensions between the US and Venezuela may cause short-term export volume decline, but the medium- to long-term risk of supply interruption is relatively low. However, supply constraints will limit the further increase in export volume [35] - The potential buyers of sanctioned oil floating storage are limited to a relatively fixed group. As maritime inventory continues to rise, price competition for sensitive oil has become more intense. The landed cost discount of Russian ESPO crude oil has significantly weakened to -$7.5 per barrel after the escalation of sanctions to attract buyers. The small amount of new crude oil import quotas issued by China at the end of the year may boost short-term import demand. However, due to the threat of sanctions, ports have strengthened supervision of shadow fleets, slowing down the unloading speed and limiting the digestion of floating storage [36] High Maritime Inventory Intensifying Supply Surplus Risk, Low Prices Potentially Driving Down Growth Potential OPEC+ Idle Capacity Concentrated in Saudi Arabia, Low Prices May Lead to Policy Shift - OPEC+ began to exit voluntary production cuts in April and increased the production target by a total of 2.88 million barrels per day by the end of the year. The production target of the eight voluntary production-cutting countries in December rose to 33.29 million barrels per day. OPEC+ decided to suspend production increases in Q1 2026 at its November and December meetings, indicating a cautious view on short-term market supply and demand [42] - According to OPEC monthly reports, the production of the eight voluntary production-cutting countries rebounded to 32.96 million barrels per day in November, an increase of nearly 2 million barrels per day compared to March, but lower than the increase in the production target. Iraq's production growth was relatively small, and Russia's production increased slightly after September, but both countries' production was about 0.12 million barrels per day lower than the target on average, partially fulfilling compensatory production cuts. Kazakhstan's production increased significantly at the beginning of the year and remained at a high level of 1.84 million barrels per day in most months. However, production decreased from October to November, and the average overproduction scale decreased from 0.33 million barrels per day to 0.16 million barrels per day, mainly due to oilfield maintenance and pipeline attacks. Other voluntary production-cutting countries steadily increased production and were close to their production targets. Among non-voluntary production-cutting countries, Nigeria and Libya's production remained at a high level since 2022, with average production of 1.5 million and nearly 1.3 million barrels per day respectively [43] - The cumulative scale of OPEC+'s compensatory production cuts updated in December was still as high as 4.59 million barrels per day. In several updates this year, the total amount of compensatory production cuts decreased only slightly, indicating that compensatory production cuts have limited binding force on actual production, mainly because Kazakhstan's continuous overproduction offset the production reduction of other countries. The compensatory production cut scale of Iraq, the UAE, Oman, and Russia decreased from 3.27 million barrels per day in April to 1.23 million barrels per day in December, and the actual effect of future compensatory production cuts may still be limited [44] - The impact of OPEC+'s production increase on export volume changes was lagging. From April to August, export volume increased only slightly month-on-month and did not cause a supply shock to the market. However, since September, OPEC+'s export volume has increased significantly. The average export volume of the eight voluntary production-cutting countries from September to November was 21.55 million barrels per day, an increase of about 1.4 million barrels per day compared to the average of the previous eight months. Saudi Arabia's export volume rebounded to around 6.6 million barrels per day, contributing the most to the increase. Russia's export volume increased periodically, but sanctions and attacks on energy facilities added uncertainties. Iraq's average export volume in the first 11 months was 3.34 million barrels per day, slightly lower than the previous year. Exports through the Ceyhan terminal resumed in October after a two-year interruption, but the current export volume is only about 0.2 million barrels per day, half of the normal level, hindering production increase. With the increase in OPEC+'s export volume, the global volume of crude oil in transit at sea has increased significantly. In the short term, a decrease in Middle Eastern refinery processing volume and a decrease in exports from some regions due to sanctions or conflicts are expected to be more conducive to maintaining high export volumes of other alternative oil types in the Middle East [48] - Saudi Arabia has the highest remaining idle capacity, with a potential production increase of about 1.5 million barrels per day based on its historical maximum production. Other members' theoretical idle capacity is relatively low. In terms of production growth potential, Saudi Arabia's high idle capacity and strict historical compliance rate give it high growth potential in the future. Other members are approaching or exceeding their production capacity limits, weakening their further production growth potential. Therefore, future OPEC+ production policy decisions will depend more on Saudi Arabia's willingness to increase production and its bottom line for oil prices. After continuous production increases by OPEC+ and non-OPEC+ countries this year, most supply increments have been realized. As the production growth potential of competitors approaches a bottleneck, Saudi Arabia's urgency to increase production has decreased, and its demand to maintain relatively stable oil prices may increase. If oil prices weaken further due to surplus expectations, there is a higher possibility of an OPEC+ policy shift, which will support oil prices [49] US Production Increase Relying on Efficiency Improvement, Low Oil Prices Constraining Production Growth Potential - According to EIA data, the average US crude oil production in the first three quarters was 13.52 million barrels per day, an increase of 0.31 million barrels per day compared to last year. Monthly production continued to reach new highs, with an expected production of 13.84 million barrels per day in October. Falling oil prices have significantly constrained upstream producers' capital expenditure willingness. The number of US oil rigs decreased significantly from late April to early August and then stabilized. As of the second week of December, the number of Baker Hughes oil rigs fluctuated between 410 - 420, a decrease of about 15% from the high point this year. The number of fracturing equipment decreased year-on-year until September and then rebounded slightly, fluctuating between 173 - 179, a decrease of about 18% from the high point [52] - In this US production increase cycle, the peak number of rigs occurred at the end of December 2022, and then the number decreased. Although the decrease in rigs weakens production growth potential, US production has still increased, albeit at a slower rate in the past two years, indicating that current production increases mainly rely on efficiency improvement. Currently, efficiency improvement is mainly reflected in the increase in rig use efficiency, showing that producers are more focused on optimizing capital use efficiency to control capital expenditure in a low oil price environment. According to EIA data, the crude oil production per new well per rig in the Permian shale oil region in the first three quarters increased by 11% compared to the average in 2024. The initial production per unit horizontal well of new wells in the two core Midland and Delaware blocks decreased in the first half of the year compared to last year. Since 2023, the unit production efficiency of the two core blocks has declined, indicating that there is a bottleneck in further improving the production efficiency of existing production areas [58] - Productivity data in shale oil regions show that the number of DUC wells in the Permian region is still gradually decreasing, which can supplement the number of completed wells to some extent when the number of rigs decreases. According to calculations, in two sub-blocks of the Permian, about 50% of unproduced wells are expected to have a break-even price of less than $60 per barrel. Other blocks have higher break-even prices. Therefore, if oil prices fall further, the economic advantage of Permian wells is beneficial for maintaining stable production, while the risk of production cuts in other blocks increases. However, research shows that in major oil-rich regions, after years of development, the gas-oil ratio of new wells has been continuously rising, which may be due to the decline in reservoir pressure in mature production areas, which is more conducive to natural gas recovery and may affect the well decline rate. Therefore, it is more difficult for producers to maintain production. Under capital expenditure constraints, production growth potential may be further constrained [60] - Considering the expected break-even price of about $60 per barrel for large producers in 2025 and the rapid decrease in the number of rigs after the oil price decline in Q2, shale oil producers are highly sensitive to medium-term oil prices. Therefore, without the expectation of a significant increase in the oil price center, producers' willingness to significantly increase capital expenditure remains low, and the situation of limited US production growth potential has not shown signs of reversal. Thanks to the contribution of efficiency improvement to production increase, the EIA has raised its forecast for US crude oil production growth in 2025 to 0.38 million barrels per day and expects a decrease of 0.08 million barrels per day in 2026. However, given the short investment cycle of shale oil and its sensitivity to oil prices, if oil prices rise significantly in the future and are higher than the break-even price, the willingness to increase capital expenditure will increase US production growth potential, and the US production forecast may need to be revised upwards [62] South American Production Peak Has Passed, Expected Significant Decline in YoY Growth Rate in H2 2026 - The IEA expects the total global upstream oil and gas investment in 2025 to be about $570 billion, a 4% decrease compared to the previous year. Since 2020, although the oil price center has been higher than in the previous cycle, upstream capital expenditure has

Report Industry Investment Rating - The investment rating for asphalt is "Bearish" [1] Core Viewpoints of the Report - In 2026, asphalt demand is unlikely to improve significantly due to financial constraints on road projects and shrinking housing new construction areas. The cost side will be a more important concern. Oil prices will face supply pressure at least in the first half of 2026, and the asphalt price is expected to continue to decline. If the downward pressure on the cost side eases, the price may bottom out during the seasonal demand peak in the second half of the year. The annual price is projected to range between 2,600 - 3,400 yuan/ton [3][70][71] Summary by Relevant Catalog 1. 2025 Annual Review of Asphalt Market - **Domestic Supply Increase and Resilient Imports**: From January to November 2025, the national petroleum asphalt production reached 26.4 million tons, a year - on - year increase of 9.75%. The increase in supply was mainly due to the decline in international oil prices and the widening discount of diluted asphalt. Local refineries' production was more volatile, with an output of 14.35 million tons, a year - on - year increase of 16.13%, while the output of major refineries was 12.05 million tons, a year - on - year increase of 3.02%. In the same period, the domestic asphalt import volume reached 3.55 million tons, a year - on - year increase of 9.2%, with Middle Eastern asphalt gradually squeezing the market share of Southeast Asian countries [17][26] - **Demand Growth Driven by Road Project Deliveries**: In 2025, as the end - year of the 14th Five - Year Plan, road construction projects entered the concentrated delivery period. From January to November 2025, the apparent consumption of asphalt reached 29.36 million tons, a year - on - year increase of 9.25%, with a 25% year - on - year increase in the third quarter. However, highway investment continued to decline, and the waterproofing market demand was weak due to the low real - estate climate [28] 2. Persistent Tight Funds, Road Demand Hard to Improve Substantially - **New Road Construction**: Most road construction projects rely on government fiscal funds or special bonds. Currently, local governments face significant financial pressure, making it difficult for project funds to be in place in a timely manner. Although the new special bond issuance increased in 2025, the funds available for new road projects continued to shrink [37][38] - **Road Maintenance**: The maintenance funds for expressways and ordinary national and provincial roads are facing shortages. The establishment of toll stations can only meet their own funding needs, and the overall road maintenance fund gap will exist for a long time [40] 3. Refineries without Quotas Gradually Exit, No Excessive Concerns about Raw Material Imports - **Exit of Refineries without Quotas under New Consumption Tax Deduction Policy**: Since 2025, Shandong Province has adjusted the consumption tax deduction policy for local refineries, which has led to an increase in asphalt production costs. From January to November 2025, the cumulative import of diluted asphalt decreased by 40% year - on - year, and many small and medium - sized local refineries without quotas have stopped production [43][44] - **Limited Impact of US Sanctions on Raw Material Imports**: Although the US has imposed sanctions on Venezuela and Russia, the supply of asphalt raw materials remains stable overall. In 2025, the import of Merey crude oil increased significantly, and other oil types such as Urals, Buzios, and Mero also became important supplements [52][54] 4. International Oil Prices are Still Suppressed by Supply Release, Cost - Side Rebound is Restricted - **Supply Growth in Non - US and Non - OPEC+ Countries**: In 2026, the global crude oil production is expected to reach 79.55 million barrels per day, with non - US and non - OPEC+ countries contributing an incremental supply of 230,000 barrels per day. Brazil, Canada, and Guyana will be the main sources of supply growth [61] - **Inventory Pressure**: Since September 2025, the global crude oil floating storage has increased sharply. If the floating storage is released into the market, it will put pressure on oil prices in the first half of 2026 [67] 5. Investment Recommendations - In 2026, the asphalt price is expected to continue to decline in the first half of the year. If the downward pressure on the cost side eases, it may bottom out during the seasonal demand peak in the second half of the year. The annual price is projected to range between 2,600 - 3,400 yuan/ton [71]