Good morning, traders! We’ve got a mixed bag in the Chinese futures market this morning, but let’s be clear β energy is absolutely dominating the narrative. SC Crude Oil is surging, up nearly 3%, and that energy appetite is spilling over into Fuel Oil and Low Sulfur Fuel Oil (LU), both boasting gains of over 2%.
Photo source:www.bloomberg.com
And it doesn’t stop there. We’re seeing solid moves in Soda Ash, again in Low Sulfur Fuel Oil, Meal, Asphalt, and Glass β all trading over 1% higher. Soybean #1 is also joining the rally, nearly hitting a 1% bump. It’s a decent start to the session, but not without some skittishness.
On the downside, Gold is taking a hit, dropping over 1%, and Red Dates are also feeling the pain. Coal Tar and Shanghai Lead are also retreating, sliding close to 1%.
Let’s break down some key aspects here:
Firstly, the robust gains in crude oil and fuel oil point to continued concerns over global supply, potentially driven by geopolitical tensions and anticipated demand increases as we head into peak season.
Secondly, the strength in industrial materials β Soda Ash, Asphalt, and Glass β hints at underlying confidence in the recovery of domestic infrastructure projects and potentially, the real estate sector.
Finally, the dip in gold reflects, at least temporarily, a βrisk-onβ sentiment, as investors shift capital towards higher-yielding assets. However, I wouldn’t write off gold just yet β it’s a classic safe haven and will likely rebound with the next wave of uncertainty.
