Price trend:
The asphalt market experienced a significant decline in October. A few projects in Shandong were rushing to complete, primarily consuming low-priced resources and driven by immediate needs. According to data monitored by SunSirs, the ex-factory price of heavy traffic asphalt #70 in Shandong was 3,583 RMB/ton on October 1st, and by October 31st, it was 3,223 RMB/ton, a decrease of 10.05%.
Analysis review
Cost factors influenced the asphalt market in the first half of the month. Crude oil prices continued to fall after the holiday, dropping by 11% by the 22nd. Prices rebounded in the latter half of the month, but after a brief correction due to demand, contracts continued to decline. On the supply side, supply was ample since September. The overall operating rate of asphalt production facilities in China remained at a relatively high level, with most local refineries maintaining high production activity, leading to increased supply pressure recently. Mid-week asphalt production was approximately 550,000 tons, a slight decrease of 11,000 tons week-on-week, but an increase of 140,000 tons year-on-year.
On the demand side, projects in Shandong were nearing completion as the weather improved, with most offering low-priced goods. Nationwide, in the Northwest, projects were nearing completion as temperatures dropped, hindering demand. In the Northeast, the narrowing construction window and price reductions by traders created a price advantage for social inventory resources, coupled with the support of rush-to-complete demand, accelerating the destocking process.
Market Forecast:
According to SunSirs, Shandong recently released November delivery contracts, and prices have bottomed out. As temperatures dropped, demand in the north was decreasing, while demand in the south was supported by essential needs. In the short term, attention should be paid to the impact of crude oil on the asphalt market.
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