1. Report Industry Investment Rating No information provided in the content. 2. Core Viewpoints of the Report - For crude oil, recommend a bearish strategic allocation, widen the Platts north - south different oil - type spread before Libya's mid - year production increase, short the high - sulfur fuel oil cracking spread, and short the INE - Brent cross - regional spread [2]. - For methanol, suggest taking profits at high prices and widening the MTO profit at low prices [5]. - For urea, suggest a short - selling allocation, and expect short - term demand support when the substitution valuation reaches the extreme [8]. - For rubber, suggest flexible trading, taking profits on butadiene rubber out - of - the - money call options, starting to allocate put options, and continuing to hold the long NR main contract and short RU2609 position [14]. - For PVC, although the short - term fundamentals do not fully reflect the supply shock, the narrative logic turns to the blockade of the Strait of Hormuz, which may offset the negative impact of the cancellation of export tax rebates [18]. - For pure benzene and styrene, due to the continuous geopolitical conflict in the Middle East, it is recommended to stay on the sidelines [21]. - For polyethylene, wait for the marginal increase in the number of ships passing through the Strait of Hormuz and then short the LL2605 - LL2609 contract reverse spread at high prices [24]. - For polypropylene, in the short term, geopolitical conflicts dominate the market, and in the long term, the contradiction shifts from the cost side to the production mismatch [28]. - For PX, although the short - term increase is large, the valuation is expected to rise as the raw - material shortage logic further develops [30]. - For PTA, it is difficult to enter the de - stocking cycle, and the processing fee is expected to be difficult to rise, but PXN may rise significantly [33]. - For ethylene glycol, the inventory is expected to decline, but the short - term increase is large, so be aware of risks [36]. 3. Summary by Relevant Catalogs 3.1 Crude Oil - **Market Information**: INE main crude oil futures closed down 22.40 yuan/barrel, a decline of 2.94%, at 740.60 yuan/barrel; high - sulfur fuel oil futures closed down 175.00 yuan/ton, a decline of 3.79%, at 4446.00 yuan/ton; low - sulfur fuel oil futures closed down 221.00 yuan/ton, a decline of 4.11%, at 5159.00 yuan/ton [1]. - **Strategy Viewpoint**: Recommend a bearish strategic allocation, widen the Platts north - south different oil - type spread before Libya's mid - year production increase, short the high - sulfur fuel oil cracking spread, and short the INE - Brent cross - regional spread [2]. 3.2 Methanol - **Market Information**: The main contract changed by 159.00 yuan/ton, reported at 3229 yuan/ton, and the MTO profit changed by 104 yuan [4]. - **Strategy Viewpoint**: Suggest taking profits at high prices and widening the MTO profit at low prices [5]. 3.3 Urea - **Market Information**: In the spot market, Shandong, Henan, and Northeast China had no price changes; Hubei decreased by 10 yuan/ton; Jiangsu increased by 10 yuan/ton; Shanxi increased by 20 yuan/ton. The main futures contract changed by - 8 yuan/ton, reported at 1874 yuan/ton [7]. - **Strategy Viewpoint**: Suggest a short - selling allocation, and expect short - term demand support when the substitution valuation reaches the extreme [8]. 3.4 Rubber - **Market Information**: Butadiene was strong in the spot market due to import demand from Japan and South Korea. As of March 26, 2026, the operating load of all - steel tires in Shandong tire enterprises was 69.26%, up 0.04 percentage points from last week and 1.17 percentage points from the same period last year. The operating load of semi - steel tires in domestic tire enterprises was 77.10%, down 0.07 percentage points from last week and 5.52 percentage points from the same period last year. The export orders declined, and the tire inventory pressure increased. As of March 22, 2026, China's natural rubber social inventory was 1.36 million tons, a decrease of 0.4 million tons, a decline of 0.3%. The total social inventory of dark - colored rubber was 921,000 tons, an increase of 0.1%. The total social inventory of light - colored rubber was 439,000 tons, a decrease of 1% [10][12]. - **Strategy Viewpoint**: Suggest flexible trading, taking profits on butadiene rubber out - of - the - money call options, starting to allocate put options, and continuing to hold the long NR main contract and short RU2609 position [14]. 3.5 PVC - **Market Information**: The PVC05 contract fell 198 yuan, reported at 5353 yuan. The spot price of Changzhou SG - 5 was 5220 (- 230) yuan/ton, the basis was - 133 (- 32) yuan/ton, and the 5 - 9 spread was - 106 (+ 2) yuan/ton. The overall operating rate of PVC was 80.9%, up 0.8% month - on - month; the calcium carbide method was 85.2%, up 0.5% month - on - month; the ethylene method was 70.7%, up 1.5% month - on - month. The overall downstream operating rate was 46%, up 4.3% month - on - month. The in - plant inventory was 339,000 tons (- 27,000 tons), and the social inventory was 1.374 million tons (+ 3,000 tons) [16]. - **Strategy Viewpoint**: Although the short - term fundamentals do not fully reflect the supply shock, the narrative logic turns to the blockade of the Strait of Hormuz, which may offset the negative impact of the cancellation of export tax rebates [18]. 3.6 Pure Benzene and Styrene - **Market Information**: The cost - side East China pure benzene was 8940 yuan/ton, with no change. The closing price of the pure benzene active contract was 8790 yuan/ton, with no change. The pure benzene basis was 150 yuan/ton, an increase of 272 yuan/ton. The spot price of styrene was 10750 yuan/ton, a decrease of 150 yuan/ton; the closing price of the styrene active contract was 10597 yuan/ton, a decrease of 192 yuan/ton; the basis was 153 yuan/ton, an increase of 42 yuan/ton; the BZN spread was - 49.5 yuan/ton, a decrease of 33.5 yuan/ton; the EB non - integrated plant profit was - 268.6 yuan/ton, a decrease of 230 yuan/ton; the EB consecutive 1 - consecutive 2 spread was 69 yuan/ton, a decrease of 19 yuan/ton. The upstream operating rate was 69.95%, a decrease of 0.51%. The Jiangsu port inventory was 168,400 tons, an increase of 59,000 tons. The demand - side three - S weighted operating rate was 40.67%, a decrease of 0.27%. The PS operating rate was 51.40%, a decrease of 0.20%, the EPS operating rate was 63.27%, an increase of 2.27%, and the ABS operating rate was 62.60%, a decrease of 4.50% [20]. - **Strategy Viewpoint**: Due to the continuous geopolitical conflict in the Middle East, it is recommended to stay on the sidelines [21]. 3.7 Polyethylene - **Market Information**: The closing price of the main contract was 8614 yuan/ton, a decrease of 190 yuan/ton. The spot price was 8700 yuan/ton, a decrease of 225 yuan/ton. The basis was 86 yuan/ton, a decrease of 35 yuan/ton. The upstream operating rate was 74.57%, a decrease of 1.41% month - on - month. The production enterprise inventory was 587,900 tons, an increase of 19,600 tons month - on - month, and the trader inventory was 56,300 tons, an increase of 1,500 tons month - on - month. The downstream average operating rate was 40%, an increase of 2.41% month - on - month. The LL5 - 9 spread was 149 yuan/ton, an increase of 29 yuan/ton [23]. - **Strategy Viewpoint**: Wait for the marginal increase in the number of ships passing through the Strait of Hormuz and then short the LL2605 - LL2609 contract reverse spread at high prices [24]. 3.8 Polypropylene - **Market Information**: The closing price of the main contract was 9103 yuan/ton, a decrease of 166 yuan/ton. The spot price was 9300 yuan/ton, a decrease of 50 yuan/ton. The basis was 197 yuan/ton, an increase of 116 yuan/ton. The upstream operating rate was 67.65%, a decrease of 2.72% month - on - month. The production enterprise inventory was 499,700 tons, a decrease of 96,500 tons month - on - month, the trader inventory was 177,800 tons, a decrease of 15,840 tons month - on - month, and the port inventory was 69,600 tons, a decrease of 2,300 tons month - on - month. The downstream average operating rate was 46.36%, an increase of 0.65% month - on - month. The LL - PP spread was - 489 yuan/ton, a decrease of 24 yuan/ton. The PP5 - 9 spread was 366 yuan/ton, an increase of 28 yuan/ton [27]. - **Strategy Viewpoint**: In the short term, geopolitical conflicts dominate the market, and in the long term, the contradiction shifts from the cost side to the production mismatch [28]. 3.9 PX - **Market Information**: The PX05 contract fell 140 yuan, reported at 9700 yuan, and the 5 - 7 spread was 18 yuan (+ 20). The Chinese PX load was 84%, a decrease of 0.6% month - on - month; the Asian load was 72.7%, a decrease of 2.1% month - on - month. Some plants restarted or shut down. The PTA load was 81.8%, an increase of 1% month - on - month. In March, South Korea's PX exports to China were 311,000 tons, a year - on - year decrease of 28,000 tons. The inventory at the end of February was 4.8 million tons, an increase of 160,000 tons month - on - month. The PXN was 120 US dollars (- 11), the South Korean PX - MX was 112 US dollars (- 3), and the naphtha crack spread was 364 US dollars (- 4) [29]. - **Strategy Viewpoint**: Although the short - term increase is large, the valuation is expected to rise as the raw - material shortage logic further develops [30]. 3.10 PTA - **Market Information**: The PTA05 contract fell 84 yuan, reported at 6684 yuan, and the 5 - 9 spread was 96 yuan (+ 4). The PTA load was 81.8%, an increase of 1% month - on - month. The downstream load was 86.8%, a decrease of 0.8% month - on - month. The social inventory on March 27 was 2.8 million tons, an increase of 69,000 tons month - on - month. The on - disk processing fee increased by 8 yuan to 321 yuan [32]. - **Strategy Viewpoint**: It is difficult to enter the de - stocking cycle, and the processing fee is expected to be difficult to rise, but PXN may rise significantly [33]. 3.11 Ethylene Glycol - **Market Information**: The EG05 contract fell 141 yuan, reported at 5218 yuan, and the 5 - 9 spread was 116 yuan (- 9). The ethylene glycol load was 65.8%, a decrease of 0.6% month - on - month. The downstream load was 86.8%, a decrease of 0.8% month - on - month. The import arrival forecast was 117,000 tons, and the East China departure on March 30 was 12,000 tons. The port inventory was 1.075 million tons, an increase of 36,000 tons month - on - month. The naphtha - based production profit was - 3137 yuan, the domestic ethylene - based production profit was - 2727 yuan, and the coal - based production profit was 1176 yuan. The cost - side ethylene rose to 1500 US dollars, and the Yulin pit - mouth bituminous coal powder price rebounded to 690 yuan [35]. - **Strategy Viewpoint**: The inventory is expected to decline, but the short - term increase is large, so be aware of risks [36].

Report Industry Investment Rating - BU: Oscillating [1] - FU/LU: Bullish [1] Core Viewpoints of the Report - The significant collapse of the asphalt cracking spread and the extreme compression of production profits have led to a substantial shrinkage in domestic supply. Although the inventory is still at a high level, concerns about the continuous tightening of short - term supply are difficult to alleviate. With the gradual start of road demand in the north in the second quarter, the absolute price of asphalt is unlikely to decline significantly, and the slow repair of the cracking spread is more worthy of attention [2][79] - The fuel oil market has higher elasticity than the asphalt market. It is still in an oscillation period dominated by geopolitical games. The short - term risk is still the instability of supply, but in the long term, it will return to fundamental pricing. In the most optimistic scenario, the supply tension is expected to ease in late April. In the benchmark scenario, the supply gap will gradually converge, the cracking spread will weaken, and the high - low sulfur spread will gradually return to a reasonable level. Overall, no significant price correction is expected in the second quarter [3][79][80] Summary According to the Directory 1. Asphalt: Cracking Spread Collapse, Significant Supply Contraction - **Cost Increase and Profit Squeeze**: The US intervention in Venezuelan crude oil sales has led to a significant reduction in the discount of Merey crude oil, pushing up the production cost of local refineries. The closure of the Strait of Hormuz in March caused international oil prices to soar, while the increase in asphalt prices was far less than that of crude oil, resulting in a rapid decline in the cracking spread and production profits. The problem of raw material shortage is expected to persist in the second quarter [11][14][15] - **Substantial Supply Contraction and Limited Inventory Pressure**: In mid - March, major refineries reduced production or stopped shipping due to concerns about raw material shortages and increased losses. The output in March and April decreased significantly year - on - year. Overseas supply also shrank significantly. Although the current asphalt inventory is high, the short - term supply shortage makes the near - month price easy to rise and difficult to fall [21] - **Upcoming Demand and Price Support**: The second quarter is the recovery period of asphalt demand. Although the demand growth rate in the second quarter of 2026 may be lower than that in 2025, the early allocation of special bonds may support the improvement of demand. The key to the absolute price of asphalt lies in when the raw material shortage can be resolved, and the gradual return of the cracking spread is a more certain long - term trend [26][27] 2. Fuel Oil: Low - Sulfur Remains Relatively Strong, Focus on the Long - Term Return of Cracking Spread - **Disruption of Persian Gulf Fuel Oil Supply and Strong Cracking Spread**: The closure of the Strait of Hormuz on February 28 cut off the only shipping route for Persian Gulf product exports, causing a supply gap of about 250,000 tons of high - sulfur fuel oil, accounting for about 20% of global demand. The supply of low - sulfur fuel oil from key refineries has also been affected [36][37][38] - **Differentiated Trends of High - and Low - Sulfur, Low - Sulfur Gaining the Upper Hand**: At the beginning of the geopolitical conflict, high - sulfur prices rose more strongly. However, as diesel prices soared, the relative relationship between high - and low - sulfur reversed, and the high - low sulfur spread began to widen. The term structure of fuel oil also showed different trends for high - and low - sulfur [45][46][48] - **Differentiated Supply and Demand in Ports, Stable Inventory in Singapore**: The fuel oil market fluctuations vary in different regions. The supply in the Middle East has been severely affected, while Singapore has shown more resilience due to the inflow of Russian goods. The demand has also been redistributed among ports. Although Singapore has buffered the supply impact, the low - sulfur blending pool has not been substantially alleviated [58][59][69] - **The Strait of Hormuz is the Key, Don't Be Over - Optimistic about Resumed Navigation**: The current situation has not been substantially alleviated. In the most optimistic scenario, supply relief in Singapore may occur in late April, and the price correction may occur at the end of the second quarter. In the benchmark scenario, the supply gap will gradually converge, and the high - low sulfur spread will gradually return to a reasonable level. In the pessimistic scenario, fuel oil prices will continue to soar [70][75][77] 3. Summary and Outlook - The marginal changes in the supply side are the key factors affecting the asphalt and fuel oil markets in the second quarter. The main price ranges of BU, FU, and LU in the second quarter are expected to be [3800,4800], [4000,5000], and [4500,6500] yuan/ton respectively, and the high - low sulfur spread in Singapore is expected to be in the range of [100,200] US dollars/ton. If the geopolitical situation does not change significantly, opportunities to buy the asphalt cracking spread and the high - low sulfur spread at low prices can be considered. If the seasonal rigid demand for asphalt recovers strongly, the opportunity for the BU - FU spread to widen can also be considered [79][80]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - For crude oil, start a bearish strategic allocation, do long on the Platts north - south non - same oil variety spread before Libya's mid - year production increase, and short the high - sulfur fuel oil cracking spread and INE - Brent inter - regional spread [2]. - For methanol, take profit at high prices and do long on the MTO profit at low prices [4]. - For urea, short at high prices, and there may be short - term demand support when the substitution valuation reaches the extreme [7]. - For rubber, trade flexibly according to the market, gradually take profit on butadiene rubber, and continue to hold the position of buying NR main contract and shorting RU2609 [10][12]. - For PVC, expect prices to rise in the short term before the Iranian issue is resolved, but be cautious of large short - term increases [16]. - For pure benzene and styrene, stay on the sidelines due to large geopolitical impacts on the market [19]. - For polyethylene, short the LL2605 - LL2609 contract spread when the number of vessel passages through the Strait of Hormuz increases [22]. - For polypropylene, short - term geopolitical conflicts dominate the market, and long - term contradictions shift from cost - driven to production mismatch [25]. - For PX, expect the valuation to rise as the raw material shortage logic intensifies, but be cautious of large short - term increases [28]. - For PTA, it is difficult to enter a de - stocking cycle, and the processing fee is hard to rise, but PXN may rise significantly [31]. - For ethylene glycol, expect the load to decline, imports to decrease, and inventory to de - stock, but be cautious of large short - term increases [33]. Summary by Related Catalogs Crude Oil - **Market Information**: INE main crude oil futures rose 5.90 yuan/barrel, or 0.81%, to 733.10 yuan/barrel; high - sulfur fuel oil futures fell 8.00 yuan/ton, or 0.18%, to 4393.00 yuan/ton; low - sulfur fuel oil futures fell 69.00 yuan/ton, or 1.34%, to 5066.00 yuan/ton [1]. - **Strategy Viewpoint**: Start a bearish strategic allocation, do long on the Platts north - south non - same oil variety spread before Libya's mid - year production increase, short the high - sulfur fuel oil cracking spread, and short the INE - Brent inter - regional spread [2]. Methanol - **Market Information**: The main contract changed by 145.00 yuan/ton, reported at 3202 yuan/ton, and MTO profit changed by - 194 yuan [3]. - **Strategy Viewpoint**: Take profit at high prices and do long on the MTO profit at low prices [4]. Urea - **Market Information**: Regional spot prices in Shandong and Jiangsu changed by 10 yuan/ton, others remained unchanged; the main contract changed by 12 yuan/ton, reported at 1875 yuan/ton, and the overall basis was - 15 yuan/ton [6]. - **Strategy Viewpoint**: Short at high prices, and there may be short - term demand support when the substitution valuation reaches the extreme [7]. Rubber - **Market Information**: Crude oil fell, RU rebounded. Butadiene was strong due to import demand from Japan and South Korea. Butadiene rubber production lines had serious losses, reducing the operating rate. The overall market changed rapidly, with different views on the rise and fall [10]. - **Strategy Viewpoint**: Trade flexibly according to the market, gradually take profit on butadiene rubber, and continue to hold the position of buying NR main contract and shorting RU2609 [12]. PVC - **Market Information**: The PVC05 contract fell 150 yuan to 5703 yuan, the cost of calcium carbide and other raw materials changed, the overall operating rate decreased, the downstream operating rate increased, and both factory and social inventories decreased [14]. - **Strategy Viewpoint**: Expect prices to rise in the short term before the Iranian issue is resolved, but be cautious of large short - term increases [16]. Pure Benzene and Styrene - **Market Information**: The spot and futures prices of pure benzene remained unchanged, the basis decreased; the spot and futures prices of styrene fell, the basis weakened. The upstream operating rate decreased, the port inventory increased, and the demand - side operating rate increased [18]. - **Strategy Viewpoint**: Stay on the sidelines due to large geopolitical impacts on the market [19]. Polyethylene - **Market Information**: The main contract price rose 52 yuan/ton to 8767 yuan/ton, the spot price rose 100 yuan/ton, the basis strengthened. The upstream operating rate decreased, both production enterprise and trader inventories increased, the downstream operating rate increased, and the LL5 - 9 spread decreased [21]. - **Strategy Viewpoint**: Short the LL2605 - LL2609 contract spread when the number of vessel passages through the Strait of Hormuz increases [22]. Polypropylene - **Market Information**: The main contract price rose 145 yuan/ton to 9120 yuan/ton, the spot price rose 125 yuan/ton, the basis weakened. The upstream operating rate decreased, inventories at production enterprises, traders, and ports decreased, the downstream operating rate increased, and the LL - PP and PP5 - 9 spreads decreased [24]. - **Strategy Viewpoint**: Short - term geopolitical conflicts dominate the market, and long - term contradictions shift from cost - driven to production mismatch [25]. PX - **Market Information**: The PX05 contract rose 272 yuan to 9774 yuan, the 5 - 7 spread decreased. The PX load in China and Asia decreased, some devices restarted or shut down, the PTA load increased, imports from South Korea decreased, and the inventory increased [27]. - **Strategy Viewpoint**: Expect the valuation to rise as the raw material shortage logic intensifies, but be cautious of large short - term increases [28]. PTA - **Market Information**: The PTA05 contract rose 186 yuan to 6778 yuan, the 5 - 9 spread decreased. The PTA load increased, the downstream load decreased, and the social inventory was 285.4 tons on March 6th. The processing fee rose by 7 yuan to 366 yuan [30]. - **Strategy Viewpoint**: It is difficult to enter a de - stocking cycle, and the processing fee is hard to rise, but PXN may rise significantly [31]. Ethylene Glycol - **Market Information**: The EG05 contract rose 22 yuan to 5058 yuan, the 5 - 9 spread decreased. The supply - side load decreased, the downstream load decreased, imports were expected to be 11.7 tons, and the port inventory increased by 2.8 tons. The cost of raw materials changed, and the profit of different production methods varied [32]. - **Strategy Viewpoint**: Expect the load to decline, imports to decrease, and inventory to de - stock, but be cautious of large short - term increases [33].

1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - The fuel oil market structure is running strongly, with the main contract of Shanghai Futures Exchange fuel oil futures closing down 1.47% at 4,629 yuan/ton, and the main contract of INE low-sulfur fuel oil futures closing down 0.05% at 5,493 yuan/ton [1] - The number of vessels passing through the Strait of Hormuz remains low, and the scope of attacks on energy facilities in the Middle East is expanding, leading to a significant tightening of oil supply including fuel oil in the Middle East [1] - For the high-sulfur fuel oil market, although the supply from the Middle East accounts for a relatively large proportion, the accumulated onshore and floating storage inventories can fill the gap in the short term. However, if the strait is blocked for too long, supply may not meet downstream demand [1] - For the low-sulfur fuel oil market, downstream refineries have reduced their loads due to insufficient raw materials, resulting in a decline in low-sulfur fuel oil production. In addition, the most prominent contradiction in refined oil products is middle distillates, which have some overlap with low-sulfur fuel oil blending components, indirectly tightening the supply of low-sulfur oil and increasing its valuation [1] 3. Summary by Related Catalogs Market Analysis - The main contract of Shanghai Futures Exchange fuel oil futures closed down 1.47% at 4,629 yuan/ton, and the main contract of INE low-sulfur fuel oil futures closed down 0.05% at 5,493 yuan/ton [1] - The number of vessels passing through the Strait of Hormuz remains low, and the scope of attacks on energy facilities in the Middle East is expanding, leading to a significant tightening of oil supply including fuel oil in the Middle East [1] - For the high-sulfur fuel oil market, although the supply from the Middle East accounts for a relatively large proportion, the accumulated onshore and floating storage inventories can fill the gap in the short term. However, if the strait is blocked for too long, supply may not meet downstream demand [1] - For the low-sulfur fuel oil market, downstream refineries have reduced their loads due to insufficient raw materials, resulting in a decline in low-sulfur fuel oil production. In addition, the most prominent contradiction in refined oil products is middle distillates, which have some overlap with low-sulfur fuel oil blending components, indirectly tightening the supply of low-sulfur oil and increasing its valuation [1] Strategy - High-sulfur fuel oil: Short-term shock is strong, the market fluctuates greatly, and it is advisable to wait and see [2] - Low-sulfur fuel oil: Short-term shock is strong, the market fluctuates greatly, and it is advisable to wait and see [2] - Cross-variety: None [2] - Cross-period: None [2] - Spot-futures: None [2] - Options: None [2]

Core Viewpoint - The article discusses the impact of rising crude oil prices on refined oil products, highlighting the differentiated performance of gasoline and diesel margins in January, with expectations for continued divergence in February [1][12]. Group 1: International Oil Price Analysis - In January, the average WTI crude oil price increased by 4.13%, while Brent crude rose by 5.03%, driven by geopolitical tensions and supply disruptions [1]. - The outlook for February suggests a potential decline in crude oil prices, influenced by ongoing geopolitical risks and market sentiment [1][12]. Group 2: Domestic Refined Oil Price Transmission - The fluctuations in crude oil prices directly affect the domestic refining sector, impacting product prices and profit margins [2]. - In January, the gasoline market in Shandong saw a price increase of 290 CNY/ton, while the diesel market experienced a slight increase of 15 CNY/ton, despite overall price declines [4][5]. Group 3: Gasoline and Diesel Margin Analysis - The average gasoline crack spread in Shandong decreased by 16.01% to 716.14 CNY/ton, while the diesel crack spread fell significantly by 61.23% to 275.2 CNY/ton [6][8]. - The theoretical gasoline retail margin decreased by 5.17% to 1833.24 CNY/ton, whereas the diesel retail margin increased by 17.92% to 1655.86 CNY/ton [10][12]. Group 4: Future Outlook - For February, it is anticipated that gasoline margins may improve slightly, while diesel margins are expected to continue their upward trend [12][14]. - The average gasoline price in Shandong is projected to be around 7100 CNY/ton, with a trading range of 7050-7150 CNY/ton, while diesel prices are expected to be around 5650 CNY/ton [12][14].

1. Report Industry Investment Rating - High - sulfur fuel oil: Short - term neutral, pay attention to the development of the Iranian situation; medium - term bearish [2] - Low - sulfur fuel oil: Short - term neutral, pay attention to the development of the Iranian situation; medium - term bearish [2] - Cross - variety: No rating [2] - Cross - period: No rating [2] - Spot - futures: No rating [2] - Options: No rating [2] 2. Core Viewpoints of the Report - The market drivers are currently unclear with a mix of bullish and bearish factors. The geopolitical premium has declined, and the cost - side drive for FU and LU prices has weakened again. The overall contradiction in the fuel oil market is limited. There are resistances above and supports below the market. The Iranian situation is uncertain and may repeatedly disturb the market [1]. - For low - sulfur fuel oil, the overall contradiction and drive are limited. The increase in shipments from Kuwait and Nigeria will bring local pressure, while the high premium of gasoline and diesel will support the market [1]. 3. Summary by Related Catalogs Market Analysis - The main contract of SHFE fuel oil futures closed up 0.12% at 2,538 yuan/ton, and the main contract of INE low - sulfur fuel oil futures closed up 0.07% at 3,060 yuan/ton [1]. - The Iranian situation is currently under control, not affecting oil supply, and the geopolitical premium has declined, weakening the cost - side drive for FU and LU prices [1]. - The fuel oil market has a mix of bullish and bearish factors with limited overall contradictions. Short - term attention should be paid to the drag of the decline in the cracking spread in the US Gulf on the Asia - Pacific and domestic markets and the potential increase in downstream refinery demand [1]. - For low - sulfur fuel oil, the increase in shipments from Kuwait and Nigeria, especially Kuwait's high shipments in January, will bring local pressure. The high premium of gasoline and diesel will support the market [1]. Strategy - High - sulfur fuel oil: Short - term neutral, pay attention to the development of the Iranian situation; medium - term bearish [2] - Low - sulfur fuel oil: Short - term neutral, pay attention to the development of the Iranian situation; medium - term bearish [2] - Cross - variety: No strategy [2] - Cross - period: No strategy [2] - Spot - futures: No strategy [2] - Options: No strategy [2]

1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - This week, the cracking of Singapore 380 strengthened, and the monthly spread rebounded significantly. The high - sulfur cracking in Europe rebounded, and the monthly spread also rebounded significantly. The high - sulfur EW oscillated at a high level. The cracking of Singapore 0.5% was at a historical low for the same period, rebounded month - on - month, the monthly spread strengthened slightly, and the basis oscillated at a low level. In terms of inventory, Singapore residue oil had a small inventory build - up, with the inventory at a historical high year - on - year, ARA residue oil had a small inventory draw - down, and Fujairah residue oil had an inventory build - up. This week, the situation in Iran affected the global heavy - oil valuation. In the short term, the driving force of high - sulfur was stronger than that of low - sulfur, the high - sulfur spot tightened, the cracking rebounded, and the short - term downside was limited, while the low - sulfur external market remained weak [3][4] 3. Summary by Relevant Catalog Rotterdam Fuel Oil Swap Data - From January 13 to 19, 2026, for Rotterdam 3.5% HSF O swap M1, the price changed from 338.39 to 336.42, a decrease of 4.64; for Rotterdam 0.5% VLS FO swap M1, it changed from 393.07 to 385.25, a decrease of 4.33; for Rotterdam HSFO - Brent M1, it changed from - 11.61 to - 10.40, a change of - 0.31; for Rotterdam 10ppm Gasoil swap M1, it changed from 634.60 to 636.65, an increase of 2.45; for Rotterdam VLSFO - Gasoil M1, it changed from - 241.53 to - 251.40, a decrease of 6.78; for LGO - Brent M1, it changed from 21.98 to 23.36, an increase of 0.17; for Rotterdam VLSFO - HSFO M1, it changed from 54.68 to 48.83, a decrease of 0.31 [1] Singapore Fuel Oil Swap Data - During January 13 - 19, 2026, for Singapore 380cst M1, the price changed from 346.25 to 360.61, an increase of 3.77; for Singapore 180cst M1, it changed from 353.19 to 365.42, an increase of 2.15; for Singapore VLSFO M1, it changed from 422.84 to 429.94, an increase of 3.49; for Singapore GO M1, it changed from 81.26 to 83.40, an increase of 1.89; for Singapore 380cst - Brent M1, it changed from - 8.90 to - 6.58, a change of 0.21; for Singapore VLSFO - Gasoil M1, it changed from - 178.48 to - 187.22, a decrease of 10.50 [1] Singapore Fuel Oil Spot Data - From January 13 to 19, 2026, for FOB 380cst, the price changed from 344.30 to 359.26, an increase of 0.92; for FOB VLSFO, it changed from 424.25 to 431.00, an increase of 1.63; the 380 basis changed from - 1.80 to - 1.45, an increase of 0.20; the high - sulfur internal - external price difference changed from 13.4 to 12.6, a decrease of 1.1; the low - sulfur internal - external price difference changed from 15.8 to 15.6, an increase of 0.3 [2] Domestic FU Data - Between January 13 and 19, 2026, for FU 01, the price changed from 2451 to 2478, a change of - 7; for FU 05, it changed from 2469 to 2526, an increase of 6; for FU 09, it changed from 2467 to 2500, an increase of 2; for FU 01 - 05, it changed from - 18 to - 48, a decrease of 13; for FU 05 - 09, it changed from 2 to 26, an increase of 4; for FU 09 - 01, it changed from 16 to 22, an increase of 9 [2] Domestic LU Data - From January 13 to 19, 2026, for LU 01, the price changed from 3112 to 3136, an increase of 48; for LU 05, it changed from 3063 to 3052, an increase of 11; for LU 09, it changed from 3081 to 3073, an increase of 17; for LU 01 - 05, it changed from 49 to 84, an increase of 37; for LU 05 - 09, it changed from - 18 to - 21, a decrease of 6; for LU 09 - 01, it changed from - 31 to - 63, a decrease of 31 [3]

Report Summary 1. Report Industry Investment Rating - Not provided in the given content 2. Core View - This week, the cracking spread of Singapore 380 strengthened, the monthly spread rebounded significantly. The high-sulfur cracking spread in Europe rebounded, and the monthly spread also rebounded significantly. The high-sulfur EW was in a high-level oscillation. The cracking spread of Singapore 0.5% was at a historical low for the same period, rebounding month-on-month. The monthly spread strengthened slightly, and the basis oscillated at a low level. In terms of inventory, Singapore's residual oil had a slight inventory build, at a historical high year-on-year, ARA's residual oil had a slight inventory draw, and Fujairah's residual oil had an inventory build. This week, the situation in Iran affected the global heavy oil valuation. In the short term, the driving force of high-sulfur was stronger than that of low-sulfur. The high-sulfur spot tightened, and the cracking spread rebounded. The short-term downside space was limited, and the low-sulfur external market remained weak [3][4] 3. Summary by Relevant Content Rotterdam Fuel Oil Swap Data | Type | 2026/01/12 | 2026/01/13 | 2026/01/14 | 2026/01/15 | 2026/01/16 | Change | | --- | --- | --- | --- | --- | --- | --- | | Rotterdam 3.5% HSF O swap M1 | 319.41 | 338.39 | 342.84 | 333.76 | 341.06 | 7.30 | | Rotterdam 0.5% VLS FO swap M1 | 381.51 | 393.07 | 397.96 | 384.56 | 389.58 | 5.02 | | Rotterdam HSFO - Brent M1 | -12.48 | -11.61 | -11.23 | -10.45 | -10.09 | 0.36 | | Rotterdam 10ppm Gasoil swap M1 | 606.35 | 634.60 | 639.10 | 621.40 | 634.20 | 12.80 | | Rotterdam VLSFO - Gasoil M1 | -224.84 | -241.53 | -241.14 | -236.84 | -244.62 | -7.78 | | LGO - Brent M1 | 19.89 | 21.98 | 21.50 | 21.81 | 23.19 | 1.38 | | Rotterdam VLSFO - HSFO M1 | 62.10 | 54.68 | 55.12 | 50.80 | 48.52 | -2.28 | [1] Singapore Fuel Oil Swap Data | Type | 2026/01/12 | 2026/01/13 | 2026/01/14 | 2026/01/15 | 2026/01/16 | | --- | --- | --- | --- | --- | --- | | Singapore 380cst M1 | 338.12 | 346.25 | 360.39 | 359.16 | 356.84 | | Singapore 180cst M1 | 346.55 | 353.19 | 366.14 | 363.46 | 363.27 | | Singapore VLSFO M1 | 418.09 | 422.84 | 428.26 | 426.98 | 426.45 | | Singapore Gasoil M1 | 79.92 | 81.26 | 82.45 | 81.65 | 81.51 | | Singapore 380cst - Brent M1 | -9.22 | -8.90 | -7.37 | -7.10 | -6.79 | | Singapore VLSFO - Gasoil M1 | -173.32 | -178.48 | -181.87 | -177.23 | -176.72 | [1] Singapore Fuel Oil Spot Data | Type | 2026/01/12 | 2026/01/13 | 2026/01/14 | 2026/01/15 | 2026/01/16 | Change | | --- | --- | --- | --- | --- | --- | --- | | FOB 380cst | 337.29 | 344.30 | 358.10 | 358.88 | 358.34 | -0.54 | | FOB VLSFO | 417.42 | 424.25 | 431.74 | 429.02 | 429.37 | 0.35 | | 380 Basis | -1.22 | -1.80 | -1.50 | -1.45 | -1.65 | -0.20 | | High - Sulfur Domestic - Foreign Spread | 14.4 | 13.4 | 13.0 | 13.9 | 13.7 | -0.2 | | Low - Sulfur Domestic - Foreign Spread | 12.2 | 15.8 | 16.0 | 14.9 | 15.3 | 0.4 | [2] Domestic FU Data | Type | 2026/01/12 | 2026/01/13 | 2026/01/14 | 2026/01/15 | 2026/01/16 | Change | | --- | --- | --- | --- | --- | --- | --- | | FU 01 | 2436 | 2451 | 2513 | 2510 | 2485 | -25 | | FU 05 | 2465 | 2469 | 2578 | 2566 | 2520 | -46 | | FU 09 | 2452 | 2467 | 2546 | 2533 | 2498 | -35 | | FU 01 - 05 | -29 | -18 | -65 | -56 | -35 | 21 | | FU 05 - 09 | 13 | 2 | 32 | 33 | 22 | -11 | | FU 09 - 01 | 16 | 16 | 33 | 23 | 13 | -10 | [2] Domestic LU Data | Type | 2026/01/12 | 2026/01/13 | 2026/01/14 | 2026/01/15 | 2026/01/16 | Change | | --- | --- | --- | --- | --- | --- | --- | | LU 01 | 3088 | 3112 | 3159 | 3166 | 3088 | -78 | | LU 05 | 3019 | 3063 | 3087 | 3074 | 3041 | -33 | | LU 09 | 3050 | 3081 | 3112 | 3090 | 3056 | -34 | | LU 01 - 05 | 69 | 49 | 72 | 92 | 47 | -45 | | LU 05 - 09 | -31 | -18 | -25 | -16 | -15 | 1 | | LU 09 - 01 | -38 | -31 | -47 | -76 | -32 | 44 | [3]

1. Report Industry Investment Rating - Short - term outlook: Hold [1] 2. Core Viewpoints - In the medium - term, it is likely that the asphalt valuation will decline in the second half of the year. The return of major refinery production capacity and the seasonal off - peak valuation period are expected to limit the upward space of asphalt valuation. The weak and volatile cost side of crude oil will also restrict the upward space of asphalt's unilateral price [16]. - In the short - term, due to Venezuela's ongoing production increase and the release of its maritime inventory, which will suppress asphalt prices, it is recommended to take a wait - and - see approach [17]. 3. Summary by Directory 3.1 Week - on - Week Assessment and Strategy Recommendations - **Market Review**: The price trend of the asphalt's main contract in recent months is presented, with supply - demand and cost factors marked at different time points [13][14]. - **Medium - term Impact Factor Assessment**: In terms of supply, imports are expected to remain low, and major refineries are expected to resume some production, which will limit the upward movement of asphalt valuation, while local refineries are expected to remain relatively sluggish in the short - to - medium - term. In terms of demand, the start - up rate of the demand side has improved slightly compared to previous years, but the overall asphalt shipment volume is lower than expected, and the overall demand is expected to be flat after the infrastructure seasonal peak. In terms of cost, the upward space of oil prices in the second half of the year is limited, and the central range of wide - range fluctuations in oil prices is expected to move down slightly [16]. - **Short - term Factor Assessment**: Supply is neutral - bearish as the heavy - traffic asphalt start - up rate is rising and overall imports remain strong; demand is bearish as the start - up rates of all sub - sectors on the demand side are weak and the downstream shipment is dull; inventory is neutral - bearish (partially priced in) as there is a problem of weak de - stocking in the overall inventory and the domestic total inventory exceeds expectations; the cost of crude oil is expected to stop falling and stabilize, entering a weak - fluctuation process [17]. 3.2 Spot and Futures Markets - **Spot Prices**: The spot price trends of heavy - traffic asphalt in Shandong, Northeast, North China, and East China regions are analyzed [20][22][24]. - **Basis Trends**: The basis trends of asphalt in Shandong and East China regions are presented [32]. - **Term Structure**: The term structure of asphalt and the price differences between different contracts are analyzed [34]. 3.3 Supply Side - **Capacity Utilization and Profits**: The capacity utilization rate of heavy - traffic asphalt and the production profit margins of Shandong asphalt are analyzed, along with the relationships between asphalt start - up, profit, and crude oil price [41][44][45]. - **Imports**: The import volume, import profit, and cumulative import volume of asphalt from different countries are presented, as well as the monthly import volume of Venezuelan oil [49][50][53]. - **Valuation Ratios**: The valuation ratios of fuel oil/asphalt and asphalt/Brent are analyzed [56]. - **Refinery Profits**: The refining profit margins of major refineries and Shandong local refineries, as well as the start - up rate and production profit margin of petroleum coke, are analyzed [59][62]. 3.4 Inventory - **Domestic Inventory**: The trends of domestic factory inventory, social inventory, total inventory, and diluted asphalt port inventory are analyzed [66][67]. - **Warehouse Receipts**: The trends of asphalt warehouse receipts and the virtual - to - real ratio of the main asphalt contract are presented [70]. - **Inventory and Price**: The relationships between inventory, profit, and price are analyzed [72][74]. 3.5 Demand Side - **Enterprise Shipment Volume**: The asphalt shipment volumes of Chinese, Shandong, East China, and North China sample enterprises are analyzed [78][80][83]. - **Downstream Start - up Rates**: The start - up rates of rubber shoe materials, road - modified asphalt, and waterproofing membranes are analyzed [86][88][92]. - **Highway Investment**: The cumulative investment in highway construction and the monthly year - on - year and monthly values of public fiscal expenditures on transportation are analyzed, as well as the relationship between asphalt demand and transportation fiscal expenditures [93][96][100]. - **Road - related Machinery**: The monthly sales volumes and working hours of road - related machinery such as rollers and excavators are analyzed [101][105]. - **Related Consumption**: The cumulative year - on - year growth rates of fixed - asset investment in railway, road, and water conservancy industries, as well as the cumulative issuance of local government special bonds, are analyzed [108][109]. 3.6 Related Indicators - **Positions, Trading Volumes, and Price Volatility**: The trading volume, position, and 20 - day historical volatility of asphalt futures are analyzed [114][117][119]. 3.7 Industry Chain Structure Diagram - **Crude Oil Industry Chain**: The exploration and production links of the crude oil industry chain are presented [123][124]. - **Asphalt Industry Chain**: The production processes and uses of asphalt are introduced [125][127].

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - Before the holiday, the 380 cracking spread fluctuated, and after the holiday, it weakened slightly. The 380 monthly spread rebounded from its low but remained weak year-on-year. The high-sulfur cracking spread in Europe weakened, and the monthly spread oscillated at a low level. [3] - The 0.5% cracking spread in Singapore oscillated at a historical low, with the structure turning to Contango at a historical low and the basis oscillating at a historical low. [3] - In terms of inventory, Singapore's residue stocks increased significantly, high-sulfur floating storage decreased significantly, ARA's residue stocks increased slightly, Fujairah's residue stocks decreased, high-sulfur floating storage decreased, and EIA's residue stocks increased slightly. [4] - The conflict in Venezuela escalated over the weekend, having a short-term positive and long-term negative impact on heavy crude oil. Attention should be paid to the duration of logistics disruptions. The arrival premium of Merey crude at the end of December remained around -12. [4] - The high-sulfur spot market remained loose. Attention should be paid to the boost brought by the premium and discount of heavy raw materials recently. The low-sulfur market maintained a weak oscillation pattern. [4] 3. Summary by Relevant Catalogs Rotterdam Fuel Oil Swap Data | Product | Change from 2026/01/09 - 2026/01/15 | | --- | --- | | Rotterdam 3.5% HSF O Swap M1 | -9.08 | | Rotterdam 0.5% VLS FO Swap M1 | -13.40 | | Rotterdam HSFO - Brent M1 | 0.78 | | Rotterdam 10ppm Gasoil Swap M1 | -18.15 | | Rotterdam VLSFO - Gasoil M1 | 4.75 | | LGO - Brent M1 | 0.00 | | Rotterdam VLSFO - HSFO M1 | -4.32 | [1] Singapore Fuel Oil Swap Data | Product | Change from 2026/01/09 - 2026/01/15 | | --- | --- | | Singapore 380cst M1 | 0.78 | | Singapore 180cst M1 | -2.68 | | Singapore VLSFO M1 | -3.01 | | Singapore Gasoil M1 | -0.60 | | Singapore 380cst - Brent M1 | 0.27 | | Singapore VLSFO - Gasoil M1 | 1.43 | [1][9] Singapore Fuel Oil Spot Data | Product | Change from 2026/01/09 - 2026/01/15 | | --- | --- | | FOB 380cst | 0.78 | | FOB VLSFO | -2.72 | | 380 Basis | 0.05 | | High-Sulfur Domestic-International Spread | 0.9 | | Low-Sulfur Domestic-International Spread | -1.1 | [2] Domestic FU Futures Data | Product | Change from 2026/01/09 - 2026/01/15 | | --- | --- | | FU 01 | -3 | | FU 05 | -12 | | FU 09 | -13 | | FU 01 - 05 | 9 | | FU 05 - 09 | 1 | | FU 09 - 01 | -10 | [2] Domestic LU Futures Data | Product | Change from 2026/01/09 - 2026/01/15 | | --- | --- | | LU 01 | 7 | | LU 05 | -13 | | LU 09 | -22 | | LU 01 - 05 | 20 | | LU 05 - 09 | 9 | | LU 09 - 01 | -29 | [3]