Summary of Conference Call Notes Industry Overview - The notes discuss the impact of escalating conflicts in the Middle East, particularly the joint airstrikes by the US and Israel on Iran, which have led to significant disruptions in the Strait of Hormuz, affecting global oil and LNG transportation [1][2]. Key Points and Arguments 1. **Market Dynamics**: The market has shifted to an "event-driven" mode, where oil price movements are expected to directly influence market direction. A sustained increase in oil prices could lead to a rapid "Risk Off" scenario due to potential supply chain disruptions [1]. 2. **Conflict Escalation**: The expectation has shifted from a "lightning war" to a "protracted war," with military actions anticipated to continue for approximately four weeks, and Iran claiming it has over six months of high-intensity warfare capability [1][2]. 3. **Energy Sector Impact**: The shipping in the Strait of Hormuz has seen substantial stagnation, with insurers withdrawing coverage for the area, affecting about 20-25% of global oil transport and 20% of LNG transport [2]. 4. **Asset Price Outlook**: Three scenarios for asset price movements are outlined: - **Scenario One**: Quick resolution of the conflict leading to a peak and subsequent decline in oil prices, which would stabilize market liquidity and risk appetite [4][5]. - **Scenario Two**: Prolonged conflict with manageable intensity, resulting in fluctuating oil prices and a gradual increase in precious metals while risk assets remain volatile [5]. - **Scenario Three**: Long-term escalation of the conflict, leading to persistent high oil prices and a stagflation environment, with a risk of rapid declines in equity assets [6]. Additional Important Content - **Market Volatility**: The current market is experiencing tightening liquidity alongside constrained oil supply, leading to various asset classes, including equities and precious metals, facing downward pressure [3]. - **Equity Market Strategy**: The A-share market is in a medium volatility state, with expectations for a return to lower volatility levels before significant upward movement can occur. The correlation between A-shares and US stocks suggests that monitoring US market conditions could be beneficial for A-share strategies [7]. - **Investment Opportunities**: Short-term cyclical industries, particularly energy, are expected to enter a price increase cycle due to supply chain constraints. Conversely, sectors like aviation and social services may face pressure from rising costs and increased travel risks [9]. Conclusion - The ongoing geopolitical tensions and their implications for oil prices and market dynamics are critical for investors. The outlined scenarios provide a framework for understanding potential market movements and investment strategies in the current environment.

1. Report Industry Investment Ratings - Crude oil: ☆☆☆ [1] - Fuel oil: ★☆★ [1] - Low-sulfur fuel oil: ★☆☆ [1] - Asphalt: ☆☆ [1] 2. Core Views - The crude oil price rebounded significantly, but the long - term supply - demand relaxation suppresses the upward space of oil prices [1] - The fuel oil market is expected to follow the crude oil and continue to fluctuate strongly, with the pattern of differentiation between high - and low - sulfur fundamentals continuing [2] - The asphalt showed a strong performance, with cost - side multiple boosts [3] 3. Summary by Related Catalogs Crude Oil - Brent crude rose to nearly $67 per barrel, and WTI to nearly $63 per barrel [1] - Winter storms caused the US energy infrastructure and power grid to be under pressure, and oil producers lost up to 2 million barrels per day of production last weekend, accounting for about 15% of the national output [1] - The Tengiz oilfield could not recover less than half of its normal production by February 7, and its recovery has been falling short of expectations [1] - API inventory data showed a draw in crude oil, which was bullish [1] - The continuous weakening of the US dollar index also boosted the oil price [1] - The global crude oil market in January 2026 has significant inventory pressure, and the supply - demand relaxation is a long - term factor suppressing the upward space of oil prices [1] Fuel Oil & Low - Sulfur Fuel Oil - High - sulfur fuel oil continued to strengthen structurally, with the spot premium widening, due to port congestion in Singapore and geopolitical tensions in the Middle East [2] - For low - sulfur fuel oil, the cold wave pushed up the natural gas price, and the strengthening of diesel cracking supported the low - sulfur cracking spread [2] - In the medium term, the supply of low - sulfur fuel oil is expected to show a slight growth trend, with increased exports from Kuwait and a postponed return of the RFCC unit of Nigeria's Dangote refinery [2] Asphalt - The asphalt main contract rose nearly 4%, with limited supply pressure as some refineries in Shandong stopped production and major refineries in the South maintained normal production [3] - The shipment volume of 54 sample enterprises increased by 15% month - on - month, and downstream consumption improved [3] - Since January, the shipment of Venezuelan oil to China has decreased significantly, and refineries may face higher costs of alternative raw materials in the later first quarter [3] - The cost - side boosts made the asphalt perform strongly [3]

1. Report Industry Investment Ratings - No relevant information provided 2. Core Views of the Report - The report analyzes the market conditions of various commodities, including energy, metals, chemicals, and agricultural products, and provides short - to medium - term trend forecasts and trading suggestions for each. It also touches on the performance of stock indices and government bonds, highlighting the influence of factors such as geopolitics, weather, supply - demand relationships, and policies on the markets [2][3][4] 3. Summary by Commodity Categories Energy - **Crude Oil**: Night - session oil prices rebounded sharply. Brent crude rose to nearly $67/barrel, and NTI to nearly $63/barrel. Winter storms led to a maximum daily production loss of 2 million barrels in the US, about 15% of the national output. The Tengiz oil field's recovery was slow. API inventory data showed a drawdown, and the weakening US dollar index also boosted oil prices. However, the global crude oil market in January 2026 faced significant inventory pressure, and the long - term supply - demand surplus limited the upside of oil prices [2] - **Fuel Oil & Low - Sulfur Fuel Oil**: Driven by geopolitical factors, bad weather in North America, and oil field fires in Kazakhstan, the cost of crude oil increased, driving fuel oil prices up. Uncertainty in the Middle East provided support for high - sulfur fuel oil prices. The tightness of Singapore's port supply eased for low - sulfur fuel oil, and the strengthening of diesel cracking supported the low - sulfur fuel oil crack spread. In the medium term, overseas refinery supply is expected to increase slightly. Fuel oil is expected to follow crude oil in a strong - side oscillation, with a differentiation between high - and low - sulfur fundamentals [22] - **Asphalt**: Night - session oil prices soared, and asphalt followed. Since January, the shipment of Venezuelan oil to China has decreased significantly, and refineries may face higher costs for alternative raw materials in the later first quarter. With multiple boosts from the cost side, asphalt oscillated strongly [23] Metals - **Precious Metals**: The US dollar index hit a four - year low overnight, and precious metals continued to perform strongly. Gold's upward logic was firm, while silver and platinum were more volatile. Attention should be paid to the situation in the Middle East and the guidance of the Federal Reserve meeting [3] - **Base Metals** - **Copper**: Night - session copper prices oscillated. The LME spot discount widened to $93. Market focus shifted to geopolitical risks, the US government's potential shutdown, and internal conflicts in the US. Copper prices are expected to oscillate at high levels and tend to adjust [4] - **Aluminum**: Shanghai aluminum oscillated at high levels. Spot premiums and discounts varied in different regions, and aluminum rod processing fees were low. Geopolitical games affected market sentiment. Attention should be paid to whether a directional breakthrough can be made in the high - level oscillation range [5] - **Zinc**: The external market strengthened, driving the domestic market up. The import loss of zinc ingots widened to over $2,500/ton. Domestic traders' willingness to support prices increased, and the spot premium stopped falling. High natural gas prices in Europe and the US and low TC pushed up the overseas zinc smelting cost, supporting high zinc prices. However, the off - peak consumption season limited the upside, and zinc prices are expected to oscillate between 24,000 - 25,000 yuan/ton before the Spring Festival [8] - **Lead**: Transportation in central and eastern China recovered, and primary lead smelters resumed production in late January. With weak downstream demand, Shanghai lead prices declined. The import profit of lead ingots narrowed to 86 yuan/ton. As lead prices fell to around 17,000 yuan/ton, downstream inventory - building willingness increased. The refined - scrap price difference was 100 yuan/ton, and the loss of recycled lead producers widened. Shanghai lead is expected to oscillate between 16,800 - 17,000 yuan/ton [9] - **Nickel and Stainless Steel**: Shanghai nickel oscillated at high levels with active trading. After the price of stainless - steel spot rose, downstream buyers were hesitant, and actual transactions were weak. The inventory of pure nickel increased by 2,700 tons to 66,000 tons, nickel - iron inventory was 29,300 tons, and stainless - steel inventory was basically stable at 844,000 tons. Caution is advised due to the market's high - price aversion [10] - **Tin**: Night - session tin prices fluctuated significantly. The trading volume and price indicated a strong trend. There have been tin ingot transactions on the Indonesian exchange this month, and the domestic tin concentrate processing fee has increased slightly. The tin market is closely related to silver prices, and its technical form remains intact. Prudent trading is recommended [11] - **Ferroalloys** - **Silicon Manganese**: The price declined during the day. Manganese ore spot prices decreased, and port inventory may start to accumulate slowly. Iron - water production remained at a seasonal low. Silicon - manganese weekly production changed little, and inventory decreased slightly. It is recommended to short on rebounds due to supply surplus and policy concerns [19] - **Silicon Iron**: The price declined during the day. Although power costs in some regions decreased, the price of semi - coke increased slightly, and most main - producing areas were still in the red. Iron - water production remained at an off - peak level. Export demand was stable above 30,000 tons, and metal - magnesium production increased. Overall demand was still resilient. Supply changed little, and inventory decreased slightly. It is recommended to short on rebounds due to supply surplus and policy concerns [20] Chemicals - **Carbonate Lithium**: Carbonate lithium prices rose again, but market trading declined. Exchange policies affected market participation. High prices may have led to a large number of hedging positions being closed, and the long - speculator - dominated position structure was fragile. Total inventory decreased by 800 tons to 109,000 tons, with different changes in various sectors. The de - stocking speed slowed down, and the futures price oscillated at high levels with high short - term uncertainty [12] - **Polysilicon**: Polysilicon futures oscillated upward, but the spot price declined. The N - type re - feed stock spot average price was 52,500 yuan/ton, down 1,500 yuan/ton from the previous day. Battery - cell prices were close to the cash - cost level. Battery - cell manufacturers were cautious about increasing production in February, and downstream acceptance of price increases was low. Although the price center may move up in the short term, the upside is limited [13] - **Industrial Silicon**: The supply side contracted, with production cuts in Inner Mongolia and planned cuts in Xinjiang. The demand side was weak overall. Polycrystalline silicon production may decline to 90,000 tons in February, and the organic - silicon operating rate was stable at around 66%. Industrial silicon inventory increased to 556,000 tons. The futures price was driven up by production - cut expectations, and it is expected to oscillate, with attention to the breakthrough of 9,000 yuan/ton [14] - **Other Chemicals**: The report also analyzed the market conditions of various other chemicals such as urea, methanol, pure benzene, styrene, polypropylene, plastic, PVC, caustic soda, PX, PTA, ethylene glycol, short - fiber, bottle - chip, etc., and provided corresponding trend forecasts and trading suggestions based on supply - demand relationships, cost factors, and policy impacts [24][25][26] Agricultural Products - **Grains and Oils** - **Soybeans and Soybean Meal**: The market has digested the South American bumper - harvest expectation. Brazilian soybean harvesting progress was affected by weather and was slow. Domestic soybean - meal commercial inventory continued to decline, and it is expected to drop to around 750,000 tons by the end of January. Attention should be paid to the Brazilian soybean harvest and the potential impact of Canadian rapeseed imports. Short - term soybean and soybean - meal prices are expected to oscillate at the bottom [36] - **Soybean Oil and Palm Oil**: Soybean and palm oil prices rose strongly with increased positions, and the oil - meal ratio also increased. Palm oil production decreased and exports improved in January, which was conducive to de - stocking. The plantation nationalization policy in Indonesia strengthened the policy - pricing power. The rising RIN price supported US soybean - oil prices. The re - inflation trading of commodities had a positive spillover effect. The high probability of an El Niño event in summer 2026 is favorable for the strong performance of oils [37] - **Rapeseed Meal and Rapeseed Oil**: Coastal rapeseed inventory remained at 60,000 tons, and Australian rapeseed had not started to be crushed. Rapeseed - meal inventory was zero in oil mills, with different changes in East and South China. The approaching Spring Festival boosted short - term demand. Uncertainty in the rapeseed market lies in the import side. Rapeseed prices are expected to oscillate in the short term, with a slow upward trend in the price center [38] - **Corn**: Northeast and northern - port corn prices were stable to weak, with a 10 - yuan/ton decrease in the Jinzhou Port flat - price. The progress of farmers' grain sales was slow, and the Spring Festival inventory - building boosted the market. Some Shandong deep - processing enterprises raised their purchase prices. Dalian corn futures are expected to oscillate in the short term [40] - **Livestock and Poultry Products** - **Pigs**: The March and May contracts of live pigs continued to weaken, and the spot price also declined. Second - fattening before the Spring Festival was basically completed, and the industry will face accelerated slaughter. It is believed that the rebound highs of live - pig futures and spot prices have passed, and pig prices are expected to hit a new low in the first half of next year [41] - **Eggs**: Egg futures prices dropped sharply, with some contracts breaking below the 60 - day moving average. The spot price remained strong, but there is a risk of a decline due to weakening pre - Spring Festival demand and the post - festival off - peak season. In the long term, the low replenishment in the second half of 2025 will lead to a continuous decline in the存栏 of laying hens in the first half of 2026, and egg prices are expected to strengthen after the post - festival off - peak season [42] - **Other Agricultural Products** - **Cotton**: US cotton rebounded strongly, with strong bottom support and still oscillating in the bottom range. Brazilian cotton exports in the first four weeks of January decreased compared to the same period last year. Zhengzhou cotton oscillated at high levels, with average spot transactions and a stable basis. The national commercial cotton inventory increased at the end of December. The demand is stable during the off - peak season. The policy of reducing Xinjiang's cotton - planting area has been implemented, but the specific reduction is uncertain. Spinning mills' demand for raw materials is still resilient, and Zhengzhou cotton is expected to oscillate in the near term [43] - **Sugar**: US sugar oscillated overnight. India's sugar production progress was fast, while Thailand's was slow. In China, the market focus shifted to the expected difference in production. Guangxi's production progress was slow, but there is a strong expectation of an increase in the 2025/2026 crushing season. Short - term sugar prices face upward pressure [44] - **Apples**: Apple futures prices oscillated. The Spring Festival inventory - building was at its peak, and cold - storage sales increased. Traders mainly shipped their own - sourced apples, and the purchase of farmers' apples was low. Farmers' willingness to sell increased. The market focus shifted to demand. High - quality apples are scarce, and the high purchase price and strong reluctance to sell may affect the de - stocking speed [45] - **Wood**: Wood futures prices were low. The external - market quotation decreased, and the domestic spot price was weak. The short - term arrival volume will decrease. The port - out volume increased year - on - year due to the late Spring Festival. Port log inventory was low, and inventory pressure was relatively small. Low inventory provides some support, and it is recommended to wait and see [46] - **Pulp**: Pulp futures prices declined. Due to weak downstream demand, the short - term fundamentals are still weak. The spot prices of coniferous and broad - leaved pulp are at certain levels, and port inventory has been accumulating continuously. Downstream paper mills are cautious about stocking up on high - priced raw materials, and the demand support for pulp is weak. It is recommended to wait and see [47] Financial Products - **Stock Index**: A - share major indices rose collectively yesterday. Stock - index futures contracts showed different performances. The US dollar index hit a four - year low overnight. Chip - related companies raised product prices, and the AI Agent ecosystem was booming. In the context of a weak US dollar and a strong RMB, the safe - haven market led by precious metals is still strong. The equity market in the Greater China region is expected to oscillate strongly, waiting for clarity on macro and geopolitical factors [48] - **Government Bonds**: On January 27, 2026, government - bond futures adjusted, and the curve steepened. The reasons are the strong performance of the equity market and the net redemption of bond funds. Unilateral trading may oscillate in a range in the short term. It is recommended to focus on the opportunities of steepening the TS - T curve and flattening the T - TL curve [49]