Good morning, traders! Let’s cut through the noise and get straight to the action. The domestic futures market opened with a vengeance this morning, with a majority of main contracts posting significant gains. We’re seeing a bullish surge in key petrochemicals – styrene (EB), PX, ethylene glycol (EG), PTA, butadiene rubber, PET bottles, and short staple fiber all jumped over 3%.
Photo source:www.bloomberg.com
Low sulfur fuel oil (LU) isn’t far behind, climbing close to that 3% mark, while methanol and natural rubber (NR 20) are both up over 2%. It feels good, doesn’t it? But hold your horses – it’s not all sunshine and rainbows.
We’ve also got some notable decliners. Urea and caustic soda are taking a hit, dropping more than 1%. But honestly, these dips shouldn’t overshadow the overarching positive momentum.
Let’s break down why these gains are happening.
Firstly, a resurgence in global oil prices is fueling the petrochemical rally. The energy market is sending ripples throughout the entire commodity complex. Secondly, expectations of increased downstream demand, particularly with the approaching peak season, are building up buying pressure.
Thirdly, supply-side constraints in certain sectors are further exacerbating the price increases. This isn’t just about external factors either.
Finally, and crucially, pay attention to policy shifts. Any signaling from Beijing regarding stimulus or industrial policy can have a powerful, almost immediate impact on these markets. Don’t get caught flat-footed! Keep your eyes peeled and your risk managed. We’ll continue to monitor this closely.
