【1】Market Performance: The BU 2602 contract surged strongly, closing at 2,995 with a gain of 2.57%. The intraday high reached 3,011, while the low was 2,921. Over the past seven days, the contract has accumulated a 1.4% increase, rebounding strongly after bottoming out. The next-month contract, 2603, rose 2.42%, maintaining a Contango structure with near-term prices lower than deferred prices.

【2】Spot Market: ① The Shandong heavy-duty bitumen market price stood at 2,920 yuan/ton, up 0.3% from the previous day but down 0.3% over the past week. The Shandong basis was -75 yuan/ton, narrowing by 45 yuan/ton over seven days. ② The East China heavy-duty bitumen market price was 3,130 yuan/ton, down 0.6% from the previous day. The East China basis was 135 yuan/ton, weakening by 55 yuan/ton over the week.

【3】Crack Spread: ① The BU-Brent spread recorded -135 yuan/ton, widening by 59 yuan/ton over seven days. The BU main contract rose 2.57%, while Brent crude gained 0.9% (based on the 3 PM closing price). Oil prices remain uncertain due to geopolitical tensions in Venezuela, making bitumen a challenging hedge against crude. The crack spread warrants a cautious stance.

【4】Fundamentals: The discount for diluted bitumen has widened. As of December 19, the Malaysian diluted bitumen discount reached -13.83 USD/barrel, compared to -13.46 USD/barrel on December 12. Inventory data showed social and in-plant stocks at 642,000 tons, up 0.9% week-on-week, indicating slow destocking. Shandong spot prices show signs of stabilization, supported by winter stocking demand, keeping bitumen range-bound. Recent U.S. seizures of Venezuelan oil tankers raise supply risks. Market focus remains on U.S.-Venezuela geopolitical developments and their impact on oil prices, which will influence bitumen’s absolute price trajectory.

【5】Short-Term Outlook: Fundamentals remain weak, with upside limited by subdued demand and inventory pressure. Winter stocking demand will be key. OPEC+ production increases may weigh on oil prices, likely dragging bitumen lower. Technically, bitumen prices continue to consolidate near lows, with sideways movement expected.

【6】Strategy: Expect wide-ranging fluctuations in the near term.