Market Performance - The BU 2603 main contract opened lower and maintained low-level fluctuations, closing at 3167, down 0.03% from the previous day, with a 7-day cumulative increase of 0.7% [2][32] - The next month contract 2606 remained flat compared to the previous day's closing price, while the far-month contract showed higher resilience than the near-month [2][32] Spot Market - The price of heavy asphalt in Shandong was 3100 yuan/ton, unchanged from the previous period, with a 7-day cumulative change of 0.0%. The Shandong basis was -67 yuan/ton, with a 7-day cumulative increase of 7 yuan/ton [2][32] - In East China, the heavy asphalt market price was 3200 yuan/ton, also unchanged, with a basis of +33 yuan/ton, reflecting a 7-day cumulative increase of 7 yuan/ton [2][32] Crack Spread Changes - The BU-Brent spread recorded -120 yuan/ton, with a 7-day cumulative increase of 57 yuan/ton. The BU main contract closed at 0.0%, while Brent fell by 1.7% [2][32] - Geopolitical risks related to Iran have decreased, leading to a significant drop in oil prices, which are gradually retracting previous geopolitical premiums. The uncertainty in geopolitics continues to pose risks to oil prices, while asphalt shows relative resilience during oil price declines [2][32] Fundamental Changes - According to Longzhong's spot price statistics, the low-end price of heavy asphalt in East China has stabilized at 3150 yuan/ton for five consecutive trading days, with the high-end price at 3230 yuan/ton, remaining unchanged [3][32] - U.S. traders are reportedly assisting Venezuela in floating storage sales, with recent AIS data indicating several ships have departed from Jose Port towards U.S. ports. The floating storage has decreased from 72,640 barrels on January 13 to 69,580 barrels on January 15, indicating no immediate supply risk for domestic refiners [3][33] Short-term Outlook - The near-month contract will continue to focus on geopolitical risks [5][32] - The strategy is to maintain a range-bound approach, with a focus on buying near-month contracts on dips and selling far-month contracts. The structure is to maintain a spread between the 3rd and 6th month contracts, while observing the crack spread [6][32]

Market Performance - The BU 2603 main contract experienced high volatility, closing at 3168, an increase of 0.88% from the previous day, with a 7-day cumulative increase of 1.1% [2][37] - The next month contract 2606 also saw a rise of 0.60% compared to the previous day's closing [2][37] Spot Market - The price of heavy asphalt in Shandong is 3100 CNY/ton, reflecting a week-on-week increase of 0.6% and a cumulative increase of 1.0% over the past week [2][37] - In East China, the heavy asphalt price remains stable at 3200 CNY/ton, with a basis of +32 CNY/ton, accumulating a 7-day increase of 35 CNY/ton [2][37] Crack Spread Changes - The BU-Brent spread recorded at -159 CNY/ton, with a 7-day cumulative increase of 47 CNY/ton [2][37] - The main BU contract closed up by 0.9%, while Brent decreased by 0.6% [2][37] Fundamental Changes - According to Longzhong's spot price statistics, the low-end price of heavy asphalt in East China has stabilized at 3150 CNY/ton for four consecutive trading days, with the high-end price rising to 3230 CNY/ton, an increase of 0.3% [3][38] - The net short positions for the 03 contract have been decreasing since January 8, while net long positions have been fluctuating upwards, maintaining a long-short ratio of 0.52 [3][38] Geopolitical Developments - Major traders Vitol and Trafigura have received special licenses from the U.S. to supply Venezuelan oil to Chinese and Indian refiners, aiding in the sale of large amounts of floating and in-transit Venezuelan oil [4][38] - The U.S. government has applied for court orders to seize more oil tankers related to Venezuelan oil trade, which may accelerate the dilution of floating and in-transit inventories [4][38] Short-term Outlook - The near-month contract will continue to focus on geopolitical developments [5][39] - The strategy is to maintain a range-bound approach, with a focus on buying the near-month 03 contract on dips and the far-month 06 contract [6][40]

Market Performance - The main contract BU 2603 opened high and maintained fluctuations, closing at 3140, down 0.66% from the previous settlement price, with a 7-day cumulative increase of 3.9% [31][32] - The next month contract 2606 decreased by 0.25% compared to the previous settlement price, with the near-month contract showing a larger decline than the far-month contract [31] Spot Market - The market price for Shandong heavy asphalt is 3080 CNY/ton, unchanged from the previous week, with a 7-day cumulative increase of 4.4%. The Shandong basis is -60 CNY/ton, with a 7-day cumulative increase of 12 CNY/ton [31][32] - The market price for East China heavy asphalt is 3200 CNY/ton, also unchanged. The East China basis is +60 CNY/ton, with a 7-day cumulative decrease of 8 CNY/ton [31] Crack Spread Changes - The BU-Brent spread recorded -144 CNY/ton, with a 7-day cumulative decrease of 15 CNY/ton. The main BU contract closed down 0.5%, while Brent decreased by 0.1% [31][32] - The geopolitical tensions between the US and Iran have led to stronger oil price increases compared to asphalt, indicating a risk point for the multi-crack spread [31] Fundamental Changes - According to Longzhong's spot price statistics, the reference price for Shandong independent refineries is between 3010-3140 CNY/ton, with the main reference price at 3220-3240 CNY/ton, and the market benchmark price at 3080 CNY/ton [32] - The tightening of available spot resources is noted, with East China heavy asphalt prices remaining stable [32] - Refineries are expected to gradually increase asphalt production due to acceptable profit margins, which may squeeze profit margins and require more raw materials [32][33] Short-term Outlook - The near-month contract is expected to focus on geopolitical premiums [33] Strategy - The strategy is to maintain a fluctuating approach, focusing on near-month contracts while buying low on far-month contracts, with a temporary observation on the crack spread [34]

Market Performance - The BU 2602 contract experienced intraday fluctuations, closing at 2996 with a gain of 0.27%, reaching a high of 3004 and a low of 2975, accumulating a 1.3% increase over the past week [2][32] - The next month contract 2603 saw a slight increase of 0.13%, maintaining a contango structure with near low and far high prices [2][32] Spot Market - The price of Shandong heavy asphalt remained stable at 2920 CNY/ton, with a 7-day cumulative change of 0% [2][34] - In East China, heavy asphalt is priced at 3090 CNY/ton, also unchanged, with a basis of 94 CNY/ton, reflecting a 7-day cumulative decrease of 93 CNY/ton [2][34] Crack Spread Changes - The BU-Brent spread recorded -71 CNY/ton, with a 7-day cumulative increase of 46 CNY/ton [2][34] - The main BU contract rose by 0.27%, while Brent increased by 0.2%, indicating a stable oil price influenced by geopolitical disturbances in Venezuela [2][34] Fundamental Changes - Venezuela's oil export issues remain a key risk, with sanctions causing oil to be stored on tankers. Chevron is allowed limited operations, but the majority of oil is supplied by PDVSA to China, which imports about 80% of Venezuela's crude [3][33] - Disruptions in Venezuelan supply could impact China's heavy oil and asphalt supply, potentially tightening regional availability and supporting asphalt prices [3][33] Inventory and Price Trends - The dilution asphalt discount widened to -14.03 USD/barrel as of December 23, compared to -13.46 USD/barrel a week earlier [4][34] - Total social and domestic inventory data recorded 642,000 tons, reflecting a 0.9% week-over-week increase, indicating a slow destocking trend [4][34] Strategy - The current strategy suggests a wide-ranging single-sided fluctuation in asphalt prices [6][35]

Market Performance - The BU 2602 contract closed at 2977, with a gain of 0.27%, reaching a high of 3020 and a low of 2965 during the day, accumulating a 0.7% increase over the past week [2][33] - The next month contract, BU 2603, saw a slight increase of 0.13%, maintaining a contango structure with lower near-term prices compared to longer-term prices [2][33] Spot Market - The price of Shandong heavy asphalt remained stable at 2920 CNY/ton, with a week-on-week decrease of 0.3% [2][33] - In East China, the heavy asphalt price decreased by 1.3% to 3090 CNY/ton, with a basis of 113 CNY/ton, down 75 CNY/ton over the week [2][33] Crack Spread Changes - The BU-Brent spread recorded -194 CNY/ton, with a weekly decrease of 14 CNY/ton, while the BU main contract fell by 0.6% and Brent by 0.1% [2][33] - Oil prices are influenced by geopolitical disturbances in Venezuela, leading to uncertainty in short-term price stabilization [2][33] Fundamental Changes - The dilution asphalt discount widened to -13.72 USD/barrel as of December 22, compared to -13.46 USD/barrel a week earlier, indicating a relative expansion [4][34] - Total social and domestic inventory data recorded 642,000 tons, reflecting a 0.9% increase week-on-week, indicating a slow de-inventory process [4][34] - The Shandong heavy asphalt market shows signs of stabilization, supported by winter storage prices, while supply risks are rising due to the U.S. seizing Venezuelan oil tankers [4][34] Short-term Outlook - Prices are expected to remain weak, constrained by reduced demand and inventory pressures, with attention on the winter storage market's performance [4][34] - OPEC+ production increases are likely to impact oil price levels, with asphalt prices expected to follow a downward trend [4][34] - Technically, asphalt prices are anticipated to continue fluctuating at low levels [4][34] Strategy - The recommended strategy is to adopt a wide-ranging oscillation approach [6][35]