Spot Market:

① Shandong Heavy-Grade Asphalt market price: ¥2,920/ton, unchanged from previous period; 7-day cumulative change: +0%. Shandong basis: -¥88/ton; 7-day cumulative change: -¥46/ton. ② East China heavy-grade asphalt market price: ¥3,070/ton, unchanged from previous week. East China basis: +¥62/ton, cumulative change over 7 days: -¥136/ton.

Current oil prices remain uncertain despite short-term stabilization due to geopolitical disruptions in Venezuela. Asphalt, as an oil price hedge, faces greater challenges, with crack spreads warranting a wait-and-see approach.

Fundamental Changes: Latest weekly data shows: - Supply side: China's refinery output reached 553,000 tons during the week ending December 26, up 14% week-on-week. - Demand side: Road modified asphalt operating rate stood at 20% for the week, declining for the fourth consecutive week. Low-priced goods continue to compete for sales. Large-sample Shandong producers shipped 148,600 tons that week, up 19% week-on-week. On the inventory front, social + factory inventories reached 666,000 tons, a 4% weekly increase. Overall, the fundamental data lacks significant highlights, instead reflecting the weak structural fundamentals typical of the off-season, which pressures asphalt prices upward.

Regarding the current winter stockpiling season, Ningxia Yongtong's 2026 winter-stockpiled crude-refined asphalt arrived ahead of schedule, marking the official start of the new winter stockpiling cycle. Northwest refineries like Keshihua have released winter stockpiling policies, with North China and East China policies following suit. As winter stockpiling typically offers price discounts, short-term stockpiling prices are expected to serve as price anchors. However, whether this will drive hoarding and push up winter storage prices remains a cautious wait-and-see situation.

[Short-Term Outlook: The current asphalt price center has seen a slight lift compared to early December, fluctuating around the 3000 mark with significant volatility recently. Fundamentally, downstream road demand remains in a seasonal slump, maintaining a bearish outlook. Upside potential remains constrained by weakening demand and inventory pressure. Market attention focuses on whether winter stockpiling activity gains momentum. Asphalt prices are expected to continue wide-range fluctuations in the near term, with short-term focus on how geopolitical risks disrupt oil prices and subsequently influence asphalt price movements. From a medium-term perspective, the supply-demand fundamentals for asphalt remain structurally weak, offering limited support for prices.

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