SunSirs: The Price of Domestic Asphalt Declines recently

1. Price Trend

According to the price monitor of SunSirs, the domestic asphalt price has been declining since October. As of October 15, the domestic asphalt price reported at 3,644 RMB/ ton, and the domestic asphalt price has dropped 0.38% since October. At the same time, the futures price of domestic asphalt has dropped 7.43%, and the current price of asphalt has deviated seriously.

2. Spot Market

Recently, the international crude oil market continues to have negative news, crude oil prices as a whole fell. According to official Saudi news, the country's crude oil has returned to the level of production before the attack; the international energy agency lowered its forecast for global oil demand growth in 2019 and 2020; the EIA inventory data of the United States was again negative, with both crude oil inventory and production showing an increase; the weak global economic performance limited the rise of international oil prices. In terms of asphalt Market: after the National Day holiday, the demand of asphalt in the North has not changed significantly, and the crude oil price has been continuously lower, which makes the asphalt price bear a downward trend, and the asphalt price of some refineries has been slightly reduced after the holiday. The market demand in East China continued the strong situation before the holiday, but the shipment of Sinopec and China National Petroleum Corporation (CNPC) refineries was affected to some extent during the national day, and the inventory of refineries increased significantly. At present, the resources of South China and Northeast China still continue to flow into East China. The market demand in South China and southwest China is general. After the national day, the market demand did not show a strong upward situation, the short-term asphalt market demand performance is not optimistic.

3.  Futures market

The price of domestic asphalt futures market dropped from 3110 RMB/ ton to 2,943 RMB/ ton at the beginning of the month, with a half month drop of 7.43%. Due to the stability of spot price, the asphalt base has strengthened with the decline of futures price, and there is no improvement in demand or adjustment of spot to futures. The price of domestic asphalt spot market deviates from that of futures market seriously. It is estimated that at present, the profit of delivery of domestic asphalt futures from spot to spot is constantly under exploration. As of October 14, the profit of delivery of warehouse of futures contract 1912 is - 496 RMB/ ton, the profit of delivery of factory and warehouse is - 381 RMB/ ton, and the profit of delivery of social inventory is 414 RMB/ ton.

According to the asphalt analyst of SunSirs, the demand of domestic asphalt is not strong in the peak season at present. Although the inventory of domestic asphalt manufacturers has increased, the factory price of refineries remains stable. The asphalt futures market is driven by the fluctuation of international crude oil price, the asphalt price continues to decline, and the basis difference of asphalt period is constantly widening. However, the current period deviation is serious, and it is expected that the later period deviation may shrink.

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