Futures performance: The BU 2603 main contract remained volatile. It closed at 3,358, up 0.51% from the previous session, after reaching an intraday high of 3,360 and a low of 3,306. The June far-month contract rose 0.48%.
Spot fundamentals: In East China, the high-end price for heavy-duty asphalt was 3,350 yuan per ton, unchanged from the prior day, while the low-end price held steady at 3,260 yuan per ton. With the Chinese New Year approaching, the spot market showed limited movement, remaining relatively stable with firm high and low prices.
Short-term outlook: Futures prices are primarily influenced by geopolitical developments and market risk sentiment. Former US President Donald Trump stated that Iran would not possess nuclear weapons or missiles and is considering sending a second aircraft carrier to the Middle East, warning of "very strong action" if negotiations fail. The highly uncertain US-Iran situation has heightened tensions, pushing oil prices higher, with asphalt following the upward trend. Should geopolitical tensions ease, the risk premium would likely decline. Therefore, energy commodities remain subject to significant volatility amid geopolitical shifts, warranting cautious position management and ongoing monitoring of the situation.
According to informed sources, Venezuela's state-owned oil company PDVSA has largely restored production at its self-operated oil fields and joint venture projects in the Orinoco Heavy Oil Belt, the country's core oil-producing region, lifting national crude output to nearly 1 million barrels per day. Increased Venezuelan exports have intensified competition among Chinese buyers, keeping raw material supply risks relevant. Market participants are advised to monitor substitution costs once geopolitical factors subside.
The strategic outlook provided since January 5 remains unchanged: 1. Trade near-month contracts based on oil price movements, closely watching geopolitical developments. 2. After geopolitical risks fade, far-month contracts may present buying-on-dips opportunities for the June contract, supported by improving global supply-demand dynamics, seasonal domestic demand, and potential substitution with Merey crude. With domestic Merey crude inventories expected to last until late February, post-holiday raw material risks could drive far-month prices. Additionally, as crude oil fundamentals loosen in the first quarter, a BU 3-6 spread trade is recommended. Investors may also consider long positions on the BU-Brent crack spread based on market conditions.