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SunSirs: China Asphalt Market first Rose and then Fell in March
April 01 2024 14:39:10SunSirs(Selena)

According to the commodity market analysis system of SunSirs, the domestic asphalt market rose first and then fell in March. From March 1st to 29th, the average producer price of asphalt in Shandong Province dropped from 3,603 RMB/ton to 3,576 RMB/ton, a decrease of 0.75%, and the price fell by 3.17% year-on-year.

At the beginning of the month, the supply level of asphalt resources was relatively low, and the recovery of asphalt demand was limited. Some southern regions were affected by rainy weather, and demand for shipments generally slowed down. Some refineries had high inventory pressure, and the overall trading atmosphere in the asphalt market was weak.

In mid month, the demand for hard goods is relatively scarce, and the atmosphere for low-priced asphalt spot trading is still acceptable, while the demand for high prices is average. The market recovery is slow, and the driving force for price increases is insufficient. The overall performance of asphalt is weak.

In the latter half of the month, the strong operation of international crude oil significantly supported refinery costs, and mainstream market prices remained stable with some upward trend. However, the recovery of spot demand in the asphalt market is slow, with limited trading volume. Some transactions are mainly based on low-priced resources, and overall transactions are inconsistent.

As the end of the month approaches, the northern weather is still able to recover and the temperature is rising, driving a slight recovery in market demand. At the end of the month, some expired contracts will be executed for shipment, and the market is still mostly dominated by low-priced resource transactions; In some southern regions, some refineries have implemented batch preferential policies, and downstream terminal demand has slightly improved. However, due to the influence of cloudy and rainy weather factors in the area, some resources still mainly flow into the social pool; Overall, weak demand remains the main factor limiting the upward trend of market prices, while the overall spot price of asphalt remains volatile and stable.


In terms of cost and crude oil, the US economic growth rate in the fourth quarter was revised up, partly due to strong consumer spending. In addition, the number of people seeking unemployment benefits decreased, indicating that the labor market situation remains strong. In addition, as the summer driving season approaches in the United States, gasoline consumption expectations increase, and the demand side also provides support for crude oil. Overall, oil prices may remain relatively strong in the near future. As of the close on March 28th, the settlement price of Brent crude oil futures main contract was $87.00 per barrel, an increase of $1.59 or 1.9%.

On the supply side, Qilu Petrochemical, Shandong Shengxing, and Dongming Petrochemical have successively switched to producing residual oil, but there are no plans to resume production before the end of the month, which has led to a significant decrease in production in the area. Jiangsu Xinhai intermittent production, overall supply pressure still exists; The main production in Xinjiang is relatively stable, but due to the increase in raw material prices, some refining and production plans have been further delayed, resulting in overall low supply; Positive impact on supply side.

On the demand side, there is a differentiation in the demand for asphalt spot markets. In the northern region, with the improvement of weather and temperature, the market demand for essential goods is slowly increasing, and the shipment volume of refineries has increased; Due to the influence of cloudy and rainy weather factors in East China, the overall demand is slightly flat. The demand side of the asphalt market is bearish.

As of the close of March 29th, the petroleum asphalt futures market has risen. The main asphalt contract 2406 opened at 3,690 RMB/ton, with a highest price of 3,720 RMB/ton and a lowest price of 3,682 RMB/ton. It closed at 3,716 RMB/ton in the last trading day, an increase of 33% or 0.90% compared to the previous settlement day, with a trading volume of 110,924 lots, a holding volume of 202,181 lots, and a daily increase of 1,855 lots.

In the future market forecast, international crude oil prices will fluctuate at high levels, and refinery processing costs will be supported. It is difficult to have a significant increase in overall supply. Although the demand side has rebounded in the northern region, rainfall will still have an impact. According to the asphalt analyst of SunSirs, as low-priced resources decrease, the short-term asphalt market trend is mainly focused on consolidation and observation.


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