Price trend

Following the New Year holiday, asphalt prices rose sharply. According to data monitored by SunSirs, the ex-factory price of heavy-duty asphalt 70# in Shandong province was 2,940 RMB/ton before the holiday, but on January 6th, the ex-factory price in Shandong reached 3,130-3,140 RMB/ton, a 6.7% increase. The core driver of this price increase stems from the US-Venezuela relationship, as the export of Venezuelan crude oil, which was highly relied upon by domestic refineries for asphalt production, had been disrupted, leading to raw material pressure and supply contraction for refineries.

Market Analysis

In mid-December 2025, the US escalated sanctions against Venezuela, disrupting Venezuelan crude oil exports, which are unlikely to recover in the short term. Regarding production capacity, China's total asphalt production capacity is 71.4 million tons, with independent refineries accounting for 59% (41.85 million tons), making them the main suppliers. In 2025, China imported 22.47 million tons of Venezuelan crude oil and diluted bitumen, while independent refineries produced 15.558 million tons of asphalt during the same period. The supply of Venezuelan crude oil directly determines the production capacity utilization of independent refineries.

On the supply side, domestic refineries' bitumen inventories wre only sufficient until February 2026, and the availability of low-priced raw materials will decrease sharply thereafter. Coupled with the weak demand in the first quarter, bitumen production is expected to reach 3 million tons in the first quarter, a year-on-year decrease of 15.2%. This supply contraction is the core driver of this round of price increases, and the simultaneous strengthening of the Shanghai Futures Exchange bitumen futures contract further confirms the expectation of supply contraction.

Data showed that Venezuelan crude oil and bitumen yields are significantly higher. Although Venezuelan crude is a high-sulfur, ultra-heavy variety, its low price and low premium/discount make it a clearly advantageous option for refineries due to its high yield and high added value. Other heavy crude oils had lower yields and higher procurement costs. Currently, the Venezuelan crude discount is -$13 per barrel, a price difference of $10 per barrel (equivalent to 480 RMB/ton) compared to Canadian Cold Lake crude. A disruption in the supply of Venezuelan crude would therefore increase refinery costs.

Market Forecast:

According to SunSirs, tight supply of raw materials and geopolitical premiums are supporting strong asphalt prices, but event-driven fluctuations need to be monitored. In the medium to long term, three key variables should be closely watched: US actions towards Venezuela, the recovery of Venezuelan crude oil production and exports, and domestic refineries' procurement of alternative raw materials. In addition, OPEC+'s suspension of production increases in the first quarter will support the global crude oil market, indirectly affecting asphalt costs; the subsequent situation requires continuous monitoring.

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