高硫关注需求启动节奏，低硫供应紧缩

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - Crude oil price increases drive a significant rise in low-sulfur fuel oil prices. Domestic low-sulfur supply is expected to shrink due to geopolitical factors and reduced production by some major refineries. In the overseas market, production at some refineries is affected, leading to a decrease in low-sulfur supply and exports. Meanwhile, geopolitical conflicts increase concerns about supply tightening, and the demand for bunkering in Singapore is expected to grow, intensifying concerns about supply shortages. Attention should be paid to the start of power generation stockpiling and import demand in Saudi Arabia and Egypt in the second quarter [4]. - For trading strategies, it is recommended to go long on the near-month contract of LU when it pulls back; for arbitrage, conduct a reverse arbitrage on FU59 at high prices with limited space, enter a long spread on the near-month contract of LU at low prices, and expect the LU - FU05 to fluctuate at high levels. It is advisable to hold off on options trading [5]. Summary by Directory Chapter 1: Comprehensive Analysis and Trading Strategies Comprehensive Analysis - Crude oil price increases drive a significant rise in low-sulfur fuel oil prices. Domestic low-sulfur supply is expected to shrink due to geopolitical factors and reduced production by some major refineries. In the overseas market, the Ruwais refinery in the UAE was attacked, suspending CDU capacity and affecting low-sulfur component output. The Al-Zour refinery is reducing production and is expected to undergo maintenance in April, and the Dangote refinery's gasoline unit has returned, reducing low-sulfur supply and exports. There is also a situation where low-sulfur logistics are diverted by the West. Singapore's current fuel oil inventory is at a high level, but due to the intensification of the conflict between the US, Iran, and Israel, the strait is blocked, and energy facilities in major supply regions such as Russia and the Middle East are continuously attacked, supply is expected to tighten. At the same time, bunkering at the Fujairah port is affected by geopolitical factors and fires, and the demand for bunkering may shift to Singapore, increasing the demand for bunkering in Singapore and further intensifying market concerns about supply shortages. Attention should be paid to the start of power generation stockpiling and import demand in Saudi Arabia and Egypt in the second quarter [4]. Trading Strategies - Unilateral: Go long on the near-month contract of LU when it pulls back. - Arbitrage: Conduct a reverse arbitrage on FU59 at high prices with limited space. Enter a long spread on the near-month contract of LU at low prices. The LU - FU05 is expected to fluctuate at high levels. - Options: Hold off on trading [5]. Chapter 2: Core Logic Analysis High-Sulfur Fuel Oil - Supply: The monthly increase in the cracking spread of Singapore's high-sulfur 380 is about $16 to $15 per barrel, and the weekly decrease is $4 (-21%). The spot window basis has increased by $56 to $70 per ton monthly and continued to rise by about $9 (+14%) weekly. Russia and Mexico's supply and exports have increased month-on-month, while Middle Eastern exports have stagnated. The inventory in the pan-Singapore region has continued to rise and is at a high level compared to the same period, with a large amount of Middle Eastern exports arriving in mid-to-late February [9][13]. - Demand: As the price of high-sulfur fuel oil rises, the economic efficiency of feedstock decreases, and refinery demand decreases. The terminal demand for power generation is accumulating, with the demand for power generation in South Asia in the second quarter and the Middle East in the third quarter, and there is alternative demand due to the sharp rise in natural gas prices [13]. Low-Sulfur Fuel Oil - Supply: The Dangote refinery's RFCC unit has been operating stably since February, significantly reducing low-sulfur output. The Al-Zour refinery's exports have stagnated and are expected to undergo maintenance in April. The Ruwai refinery's CDU unit has been damaged, reducing low-sulfur output and exports. Domestic refineries are concerned about raw materials, and the reduction or suspension of heavy oil production affects the production of bonded marine fuel [17]. - Demand: The number of ships arriving in Singapore in the near term has decreased. Although the bunkering demand at the Fujairah port has shifted, the high price of marine fuel in Asia has not supported the demand [17]. - Spread: The monthly increase in the cracking spread of Singapore's low-sulfur 0.5%S is about $39 to $45 per barrel, and the weekly decrease is $0.9 per barrel. The spot window basis has increased by about $139 to $139 per ton monthly and $21 per ton weekly [17]. Chapter 3: Weekly Data Tracking Supply from Different Regions - Russia: In March, Russia's refinery processing and export volumes are expected to increase. From March 5th to 11th, the average crude oil processing rate was 5.32 million barrels per day, a month-on-month increase of 240,000 barrels per day, reaching the highest level since January. Some refineries and ports have gradually recovered. Due to concerns about the loss of Middle Eastern supply, regions such as pan-Singapore, China, and India are expected to increase their purchases of Russian fuel oil. As of March 16th, a total of about 1.95 million tons have been exported, with an average daily export of 120,000 tons, a month-on-month increase of 18,000 tons (+17%) and a year-on-year increase of 27,000 tons (+28%). Exports to India have increased rapidly to 430,000 tons, and exports to the Singapore region have also increased slightly month-on-month [20]. - Mexico: Mexico's near-term exports have increased, but the total supply is limited. As of March 16th, a total of about 280,000 tons of high-sulfur fuel oil have been exported, with an average daily export of 174,000 tons, a month-on-month increase of 28%. On March 6th, Mexico's high-sulfur exports surged, with about 210,000 tons exported that week, more than half of the monthly average export volume in recent months, mainly flowing to the United States and the Netherlands. The fire at the Olmeca refinery is still being evaluated [24]. - Middle East: Due to the intensification of the conflict between the US, Iran, and Israel, the closure of the Strait of Hormuz, repeated attacks on the Fujairah port, and the reduction or complete shutdown of some refineries in the Middle East, exports from the Middle East have decreased. As of March 16th, a total of about 1.02 million tons have been exported, with an average daily export of 64,000 tons, a month-on-month decrease of 61%. The Al-Zour refinery has slightly reduced production, and the export of low-sulfur fuel oil has stagnated. The Fujairah port in the UAE has been repeatedly attacked [25][27]. - Nigeria: After the secondary unit of the Dangote refinery in Nigeria returned from maintenance in mid-February, it has been operating stably, and the low-sulfur output and exports have decreased month-on-month. In March, there was no export of low-sulfur fuel oil, and exports to the pan-Singapore region decreased by 70,000 tons to 80,000 tons in February [30]. - South Sudan: The export of Dar crude oil in South Sudan has gradually recovered, and the export tender volume has increased month-on-month. In March, the total loading volume was 3 batches of 600,000 barrels, a total of 1.8 million barrels, returning to the normal loading level of last year [33]. Inventory and Market Conditions - Inventory: As of the week of March 11th, Singapore's fuel oil inventory has risen for four consecutive weeks, reaching 24.16 million barrels (about 3.8 million tons), a new high in four weeks. The import volume of fuel oil in onshore storage tanks has increased month-on-month by 47.5%, exceeding 1.3 million tons, mainly from the Middle East. The export volume has also increased, more than doubling compared to the previous week, exceeding 500,000 tons, with China being the largest export destination [36]. - Market Conditions: In the Singapore spot window, the price of high-sulfur fuel oil 380 has increased by about 68% monthly, and the price of low-sulfur fuel oil 0.5%S has increased by about 92% monthly. The high-sulfur cracking spread has increased from -$1 per barrel to about $15 per barrel, and the low-sulfur cracking spread has increased from $6 per barrel to about $45 per barrel [36].