Core Viewpoint - The asphalt production industry is currently experiencing weak supply and demand, with operating load rates remaining low [1] Group 1: Supply Side - Asphalt production enterprises are operating at low load rates [1] - The cost side is influenced by fluctuating crude oil prices, which affect the central price of asphalt [1] Group 2: Demand Side - High temperatures and rainfall are impacting road construction in certain regions, leading to slow progress on terminal projects and overall weak asphalt demand [1] - Downstream players and traders are adopting a cautious strategy in response to the low demand [1] Group 3: Market Strategy - Short-term trading is recommended as the primary operational strategy in the current market environment [1]

Report Industry Investment Rating - High-sulfur fuel oil: Neutral [4] - Low-sulfur fuel oil: Bearish [5] Core Views High-sulfur fuel oil - OPEC+ is expected to increase production by about 550,000 barrels per day. Chevron has regained the license to produce oil in Venezuela, and the crude oil logistics from Venezuela to Asia has decreased. Currently, the high-sulfur supply in Asia is sufficient and inventories are accumulating. The bunker fuel加注 volume in Fujairah has weakened month-on-month. As the deadline for the agreement set by the US on Russia approaches, the high-sulfur price is relatively supported. Attention should be paid to the recent high-sulfur spot procurement and digestion, tariff sanctions, and crude oil quotas [4]. Low-sulfur fuel oil - OPEC+ continues to increase production, and the crude oil price is weakening. In the short term, the low-sulfur fuel oil price is expected to fluctuate. The low-sulfur arrivals in Singapore reached a high in August, and the low-sulfur shipments from Kuwait are stable, with no obvious increase in low-sulfur supply. The low-sulfur market in China has sufficient supply, and demand is mainly driven by rigid needs. The domestic bunker fuel market is at a standstill. In July, CNOOC's low-sulfur quota was exhausted, and the production scheduling expectations of Sinopec and PetroChina are weak. Attention should be paid to the recent adjustment or issuance of low-sulfur quotas [5]. Summary by Category High-sulfur fuel oil - **裂差**: Under the influence of tariff sanctions, as the negotiation deadline between the US and Russia approaches, Russian oil exports are受阻, and the supply risk premium has increased. The high-sulfur crack spread is at a high level and has strengthened compared to last week [4]. - **价差**: The decline in international crude oil prices has dragged down the fuel oil price [4]. - **供应**: The global total shipments are expected to be loose, and the arrivals in Singapore are relatively high [4]. - **需求**: The power generation demand weakened after reaching its peak in August [4]. - **库存**: Inventories at the ports of Singapore and Zhoushan have significantly increased [4]. Low-sulfur fuel oil - **裂差**: Under the influence of tariff sanctions, as the negotiation deadline between the US and Russia approaches, Russian oil exports are受阻, and the supply risk premium has increased. The low-sulfur crack spread fluctuates slightly within the range of $10 - $12 per ton and has rebounded slightly compared to last week [5]. - **价差**: The spot spread of low-sulfur fuel oil is weak and under short-term pressure, and the spread between high and low-sulfur fuels has narrowed [5]. - **供应**: The global low-sulfur supply has not changed much. Dangote Refinery cancelled its maintenance in June, and the increase in Brazilian exports has remained stable. The low-sulfur exports from Al-Zour have recovered with the end of technical problem maintenance, and recent outbound shipments have remained at a high level. In July, CNOOC's low-sulfur quota was exhausted, and the production scheduling expectations of Sinopec and PetroChina are weak [5]. - **需求**: The low-sulfur power generation demand in summer has weakened, the bunker fuel demand remains stable, and downstream buyers take delivery based on rigid needs [5]. - **库存**: The arrivals of low-sulfur fuel oil in China have continued to rise to a historical high [5].

1. Report Industry Investment Rating - The investment rating for the asphalt industry is "oscillating" [3]. 2. Core Viewpoints of the Report - The price of asphalt is affected by the weak cost side due to the six - consecutive - day decline in crude oil prices, while its own supply - demand contradiction is not prominent. In the short term, asphalt will follow the trend of crude oil and show an oscillating trend [3]. 3. Summary by Relevant Catalogs 3.1 Main Viewpoints and Strategy Overview - **Supply**: In August, the domestic refinery asphalt production plan is 2.41 million tons, a month - on - month increase of 130,000 tons (5%) and a year - on - year increase of 490,000 tons (25%). Imported asphalt from South Korea has a reduced arrival volume, supporting the increase in import prices [3]. - **Demand**: The release of demand is lower than expected. Rain in some northern regions has hindered rigid demand, and the actual trading atmosphere in the southern market is weak. This week's shipment volume is 418,000 tons, a month - on - month slight decrease of 0.2% [3]. - **Inventory**: This week, the domestic refinery inventory is in a destocking state, especially in North China. The social inventory has a slight accumulation, with the most obvious accumulation in East China [3]. - **Cost**: International oil prices have declined across the board due to multiple negative factors, and the price of US oil has fallen below the key level of $65 [3]. - **Investment Viewpoint**: In the short term, the supply - demand contradiction is not prominent, and it will follow the trend of crude oil, showing an oscillating trend [3]. - **Trading Strategy**: Unilateral trading should focus on the oscillating trend, and for arbitrage, pay attention to the 9 - 12 reverse spread [3]. 3.2 Price - The report presents the mainstream market prices of heavy - traffic asphalt in East China, South China, and other regions, as well as the import prices from South Korea and Singapore [5][12]. 3.3 Spread, Basis, and Delivery Profit - **Spread**: The report shows the historical data of asphalt cracking spread and the spread between asphalt and coking materials [17][18]. - **Basis**: It presents the basis data of asphalt in main regions such as South China, East China, and Shandong [21]. 3.4 Supply - **Scheduled Production**: In August, the production plans of different refinery groups vary. The planned production of local refineries has increased year - on - year and month - on - month [3]. - **Capacity Utilization**: The report shows the capacity utilization rates of asphalt in different regions and time periods [34][37]. - **Maintenance Loss**: It presents the weekly and monthly maintenance loss data of asphalt in China [41]. 3.5 Cost and Profit - The report shows the production gross profit data of asphalt in Shandong and the price, premium, and port inventory data of diluted asphalt [45][48]. 3.6 Inventory - **Refinery Inventory**: This week, the domestic refinery inventory is in a destocking state, especially in North China [3]. - **Refinery Inventory Rate**: It presents the inventory rate data of refineries in different regions and time periods [56]. - **Social Inventory**: This week, the domestic social inventory has a slight accumulation, with the most obvious accumulation in East China [3]. 3.7 Demand - **Shipment Volume**: This week's shipment volume is 418,000 tons, a month - on - month slight decrease of 0.2%. The shipment volume in Shandong has decreased significantly, while that in East China has increased significantly [3]. - **Downstream Operating Rate**: It presents the operating rate data of downstream industries such as road - modified asphalt, building asphalt, and waterproofing membranes [65][69].

Group 1 - The stock price of Guangju Energy (000096) closed at 12.1 yuan on August 8, 2025, with a slight decrease of 0.08% and a turnover rate of 1.04% [1] - On August 8, the net outflow of main funds was 709.99 million yuan, accounting for 11.06% of the total transaction amount [2][4] - The company announced a guarantee for its wholly-owned subsidiary, with a maximum guarantee amount of 200 million yuan, resulting in a total guarantee balance of 350 million yuan, which is 12.48% of the company's latest audited net assets [2][4] Group 2 - The company applied for a comprehensive credit limit of 2 billion yuan from six financial institutions, including China Resources Bank, using a non-guaranteed credit method [2] - The company and its subsidiaries have not provided guarantees for other units or individuals outside the consolidated financial statements, and there are no overdue guarantees or litigation-related guarantees [2]

Group 1 - The stock price of Maohua Shihua (000637) closed at 4.28 yuan on August 8, 2025, with an increase of 0.47% and a turnover rate of 3.62% [1] - On August 8, 2025, the net capital flow for Maohua Shihua showed a net outflow of 567.26 million yuan from main funds, accounting for 9.99% of the total transaction amount [1][3] - The company announced that it will hold its second extraordinary general meeting of shareholders on August 28, 2025, to review a proposal for a credit limit application of up to 500 million yuan from the bank [2][3] Group 2 - The extraordinary general meeting will adopt a combination of on-site voting and online voting, with the online voting period set from 9:15 AM to 3:00 PM on August 28, 2025 [2] - The record date for shareholders to participate in the meeting is August 21, 2025, and the meeting will take place at the company's conference room in Maoming City, Guangdong Province [2]

Investment Rating - The industry investment rating is "Positive" [1] Core Viewpoints - International oil prices have declined due to multiple negative factors, including tariff concerns and weak economic data from the US, leading to demand worries. Additionally, OPEC+ has agreed to increase production in September, raising expectations of supply surplus [2][8] - As of August 8, 2025, Brent and WTI oil prices were $66.59 and $63.88 per barrel, respectively, reflecting a decrease of 4.42% and 5.12% from the previous week [25][16] Summary by Sections Oil Price Review - Brent crude futures settled at $66.59 per barrel, down $3.08 (-4.42%) from the previous week. WTI crude futures settled at $63.88 per barrel, down $3.45 (-5.12%) [25][16] - The Urals crude price remained stable at $65.49 per barrel, while ESPO crude fell to $62.47 per barrel, down $4.68 (-6.97%) [25][16] Offshore Drilling Services - As of July 28, 2025, the number of global offshore self-elevating drilling platforms was 379, a decrease of 3 from the previous week. The number of floating drilling platforms remained at 133 [31][33] US Oil Supply - As of August 1, 2025, US crude oil production was 13.284 million barrels per day, a decrease of 30,000 barrels per day from the previous week. The number of active drilling rigs was 411, an increase of 1 rig [48][42] US Oil Demand - As of August 1, 2025, US refinery crude processing was 17.124 million barrels per day, an increase of 213,000 barrels per day. The refinery utilization rate was 96.90%, up 1.5 percentage points from the previous week [59][53] US Oil Inventory - As of August 1, 2025, total US crude oil inventory was 827 million barrels, a decrease of 2.794 million barrels (-0.34%). Strategic oil inventory increased by 235,000 barrels (+0.06%) [70][62]

Investment Rating - The industry investment rating is "Positive" as the industry index is expected to outperform the benchmark [127]. Core Insights - The report highlights a significant drop in oil prices, leading to an expansion in the price spread of refining products. As of August 8, 2025, the Brent crude oil average price was $67.67 per barrel, reflecting a decrease of 4.90% [2][12]. - Domestic key refining project price spread reached 2378.22 CNY/ton, with a week-on-week increase of 42.27 CNY/ton (+1.81%), while the international key refining project price spread was 1097.94 CNY/ton, up by 74.40 CNY/ton (+7.27%) [2][3]. - The report discusses various segments including refining, chemicals, and polyester, indicating a general trend of price declines in chemical products, although some products saw price increases due to supply constraints [2][35][72]. Summary by Sections Refining Sector - The report notes that the market is currently weighing the impacts of tariff agreements and economic data, which have led to concerns about demand. The U.S. crude oil production reached a record high in May, contributing to oversupply expectations [2][12]. - Domestic refined oil prices are fluctuating, with diesel, gasoline, and aviation fuel averaging 7077.57 CNY/ton, 8173.43 CNY/ton, and 5972.93 CNY/ton respectively [12]. Chemical Sector - The chemical sector is experiencing widespread price declines, with some products seeing price increases due to reduced supply. For instance, the price of acrylonitrile increased slightly due to supply reductions [2][35]. - Polyethylene prices showed minor fluctuations, while the price spread significantly widened, indicating a favorable market condition for producers [41][57]. Polyester Sector - The polyester sector is facing weak cost support due to falling oil prices, leading to price declines in upstream materials like PX, PTA, and MEG. The average price of PTA is currently 4684.29 CNY/ton, with an industry average net profit of -264.65 CNY/ton [81][90]. - The report indicates that the demand for polyester products remains weak, particularly in the downstream market, which is still in a seasonal lull [90][99].

Group 1 - The company, Maohua Shihua, announced that its 13th Board of Directors held a temporary meeting on August 8, 2025, via telecommunication voting [1] - The meeting reviewed a proposal regarding the company's application for a credit limit of up to 500 million RMB from banks [1]

Core Viewpoints - The weak performance of PPI is attributed to two "dark lines": the timing of statistics and low capacity utilization in the mid and downstream sectors [2][8][69] - In July, PPI continued to bottom out, with a month-on-month decline of 0.2% and a year-on-year rate of -3.6%, which was below market expectations [2][8][69] - The rise in commodity prices did not fully reflect in the PPI due to the timing of price surveys, which did not capture late-month price increases [2][8][69] PPI Analysis - The PPI's month-on-month decline was influenced by a significant drag from mid and downstream prices, which contributed to a -0.3% impact on PPI [2][13][69] - The PPI performance was also affected by tariffs, with industries heavily reliant on exports experiencing downward price pressure [2][13][69] - High-frequency data showed a divergence from PPI trends, with coal and steel prices recovering, while coal mining and black metal processing remained negative [2][8][69] CPI Analysis - In July, the core CPI rose to its highest level in a year and a half, driven by demand recovery and the end of commodity subsidies [3][20][70] - The CPI's month-on-month increase of 0.4% was slightly above the average since 2017, with core CPI rising 0.8% year-on-year [3][20][70] - The demand for core services improved due to summer travel, although rental prices remained weak [3][28][70] Food Prices Impact - Food prices were weak, constraining the CPI's recovery, with food CPI down 1.6% year-on-year, a decline that expanded by 1.3 percentage points from the previous month [4][33][71] - Fresh vegetable prices fell significantly, contributing to the downward pressure on CPI [4][33][71] - The supply of pork continued to rise, leading to lower pork prices, which also impacted the overall food CPI [4][34][71] Future Outlook - The "anti-involution" policy is expected to boost commodity prices, but excess supply in the mid and downstream sectors may limit the transmission of upstream price increases [4][39][71] - The forecast suggests that inflation will remain weak throughout the year, with limited recovery in both PPI and CPI due to the current supply-demand dynamics [4][39][71] - Core commodity CPI may be suppressed by downstream PPI, and agricultural supply is expected to remain ample, leading to moderate improvements in CPI [4][39][71]

Inflation Data Summary - On August 9, the National Bureau of Statistics released July inflation data: CPI year-on-year at 0%, previous value 0.1%, expected -0.1%, month-on-month 0.4%; PPI year-on-year at -3.6%, previous value -3.6%, expected -3.4%, month-on-month -0.2%[8]. - The weak PPI performance is attributed to low capacity utilization in mid and downstream sectors, which hinders price transmission from upstream to downstream[1][2][4]. - July PPI continued to decline, with a month-on-month change of -0.2%, not meeting market expectations of -3.4%[9][13]. - The contribution of commodity prices to PPI was estimated at 0.1% month-on-month, despite some recovery in coal and steel prices[1][9]. CPI Insights - Core CPI in July rose to its highest level in 1.5 years, driven by demand recovery and the end of commodity subsidies, with a month-on-month increase of 0.4%[21]. - Food CPI decreased by 1.6% year-on-year, with fresh vegetable prices dropping by 7.6% and fresh fruit prices increasing by 2.8%[30][43]. - The core service CPI remained stable at 0.5% year-on-year, with significant increases in travel-related costs, such as airfares rising by 17.9% month-on-month[27]. Future Outlook - The "anti-involution" policy is expected to boost commodity prices, but excess supply in mid and downstream sectors may limit price transmission from upstream, keeping inflation weak throughout the year[4][33]. - Core commodity CPI may remain subdued due to pressure from downstream PPI and abundant agricultural supply, leading to only moderate improvements in CPI[4][33].