The market analysis for July 7th shows that the afternoon closing price for the main asphalt futures contract BU2609 was 3,853 yuan per ton, representing a decline of 35 yuan from the previous day's settlement price. Open interest stood at 330,382 lots, down by 6,825 lots compared to the prior session, while trading volume was 466,450 lots, showing a decrease of 261,034 lots.
According to Zhuochuang Information, the spot settlement prices for heavy traffic asphalt were as follows: Northeast region, 4,506–4,570 yuan/ton; Shandong region, 4,040–4,550 yuan/ton; South China region, 4,350–4,700 yuan/ton; East China region, 4,500–4,700 yuan/ton.
Tensions in the Middle East have escalated once again, with Iran firing on a commercial vessel and the United States launching strikes against Iran. According to a statement from the U.S. Department of the Treasury's Office of Foreign Assets Control on July 7th local time, the U.S. has revoked a general license that had authorized the sale of Iranian oil. Related winding-down transactions will be permitted until 00:00 Eastern Time on July 17th. Part of the recent decline in oil prices had been attributed to expectations of a relaxation in U.S. sanctions on Iran. Should these sanctions be reinstated, the market could experience a rebound of a certain magnitude.
In the asphalt spot market, prices in the Northeast and Sichuan-Chongqing regions continued to decline yesterday, while prices in other areas remained largely stable. The current market is characterized by weak supply and demand, with actual spot trading being subdued. However, near-term price support remains robust.
Trading Strategy
Outright Positions: Neutral; monitor the developments in the Middle East situation.
Intertemporal Spreads: Consider taking profits and exiting existing long calendar spread positions opportunistically.
Intercommodity Spreads: None.
Basis Trading: None.
Options Strategies: None.
Key Risks
Potential risks include geopolitical conflicts, significant volatility in crude oil prices, macroeconomic risks, risks associated with overseas feedstock supply, changes in terminal demand for asphalt, and fluctuations in plant operating rates.
Comments