Factors Contributing to Asphalt Price Decline:

According to Sina Finance,demand Side: Seasonal contraction and insufficient speculative demand;

Supply Side: Production cuts remain in place, but absolute output levels remain high;

Cost Side: Volatile crude oil prices and declining raw material discounts.

Market Outlook

Weakness in Both Supply and Demand: Seasonal decline in demand, insufficient winter stockpiling speculation, coupled with weakening cost support;

Short-Term Trend: Market sentiment remains cautious with limited upward momentum, suggesting asphalt prices will maintain a weak trajectory.

According to Sina Finance, on November 6, the main asphalt contract 2601 recorded its sixth consecutive daily decline, with a weekly drop exceeding 4%. The recent sustained decline in asphalt futures stems from multiple pressures on both the supply-demand and cost fronts.

Seasonal Weakness in Demand

In northern regions, falling temperatures have curtailed road construction demand, with some projects nearing completion, limiting essential demand support. Meanwhile, southern regions see sporadic rush-order demand, but overall activity remains subdued due to delayed funding and rainy weather. Additionally, waterproofing membrane production capacity utilization has fallen below the five-year range's lower limit, while real estate construction data remains sluggish. Uncertain winter stockpiling prospects and weak speculative demand further dampen asphalt demand.

Supply-Side Pressure Emerges

Although November asphalt production plans decreased by 17.72% month-on-month (approximately 484,000 tons), actual output is still expected to exceed last year's levels, with refinery operating rates maintaining recent-year averages. Recent supply increases from refineries in Shandong and North China, coupled with slower inventory drawdowns, have resulted in ample spot market resources.

Cost-Side Support Weakens

International crude oil prices exhibited wide fluctuations with a downward bias in November, diminishing cost-side support for asphalt prices. Concurrently, the situation in Venezuela did not escalate further, leading to a significant decline in the discount for diluted asphalt. Refineries showed low enthusiasm for raw material procurement, further dampening market sentiment.

Market Outlook

In summary, the November asphalt market exhibited a “weak supply and demand” pattern. Seasonal demand decline, insufficient winter stockpiling speculation, and weakened cost support collectively exerted sustained downward pressure on futures prices. In the short term, although refinery inventory pressure remains limited, strong market caution is expected to keep asphalt prices in a weak trend.

As an integrated internet platform providing benchmark prices, on November 10, the benchmark price of asphalt from BSunSirs was 3030.00 RMB/ton, a decrease of 6% compared with the beginning of the month (3223.33RMB/ton).

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

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