With the Spring Festival holiday approaching, the asphalt market has officially entered a seasonal adjustment period. The current market trading atmosphere is increasingly sluggish, with industry players gradually leaving the market, and logistics activity falling to its lowest point of the year. Based on the current supply and demand pattern, cost evolution, and historical seasonal patterns, the asphalt market is expected to show a trend of "stable conclusion before the holiday and moderate recovery after the holiday," with the post-holiday market recovery exhibiting significant structural differentiation.

The market entered a phase of high prices but low volume before the holiday: Supply remained low, with some refineries in Shandong resuming production but operating at reduced capacity slowly, while major refineries in the south operated intermittently, with capacity utilization at around 26%. Refineries were on the verge of losses and had a strong willingness to maintain prices. Demand contracted across the board, with construction halted in the north and only sporadic waterproofing stockpiling, while the south rushed to finish construction, and logistics gradually stopped, suppressing spot market liquidity. Factory and social inventories continued to accumulate, but at a moderate pace, without creating selling pressure. In terms of prices, mainstream prices are expected to remain stable in the last week before the holiday, with only Shandong and North China, where prices had previously risen significantly, potentially seeing a slight easing of 20-30 RMB/ton.

Following the Spring Festival holiday, the asphalt market will enter a recovery transition period of approximately three weeks. Based on a comprehensive analysis of supply, cost, inventory, and demand, the post-holiday market is likely to exhibit a moderate upward trend characterized by "increased opening prices, followed by rising transaction prices, with the increase constrained by demand."

On the supply side: In February 2026, the total domestic asphalt production was 1.936 million tons, a decrease of 64,000 tons month-on-month (3.2%) and a decrease of 135,000 tons year-on-year (6.5%). This production level is the lowest in the same period in nearly three years, indicating that the overall inventory pressure of refineries after the holiday is manageable. By enterprise type, Sinopec's production was only 370,000 tons, a significant decrease of 70,000 tons month-on-month; local refineries' production was 1.058 million tons, a slight decrease of 5,000 tons month-on-month, with refineries such as Dongming, Shengxing, Jincheng, and Hualong all experiencing declines. It is worth noting that the resumption of refinery production after the holiday requires a process of warming up and debugging, with a lag of 3-7 days in actual output release, providing a valuable window for destocking in the post-holiday market. It is expected that weekly asphalt production will remain below 450,000 tons in late February, with a significant rebound expected in early March.

Cost side: Geopolitical disturbances continued

The international crude oil market has recently been significantly affected by geopolitical factors, increasing uncertainty in raw material supply. Based on current raw material prices, the overall profit margin for asphalt production has turned negative again, further increasing refineries' sensitivity to cost transmission. If geopolitical conflicts do not ease during the Spring Festival, crude oil prices will likely remain within the current range of $66-71 per barrel, or even rise slightly. After the holiday, major refineries will likely raise their asphalt prices by 50-80 yuan per ton. Even if crude oil prices decline during the holiday, refineries will resolutely maintain prices due to low profits and low production volumes. Cost will remain the primary driver of upward price movement in the post-holiday market.

Demand side: North-South divided, gradually recovered

The recovery in demand after the holiday will exhibit significant regional and structural differentiation, which is a key variable in judging the post-holiday market gains.

Southern Market (East China, South China, Southwest China): Road construction will gradually resume after the Lantern Festival (March 3rd). Downstream projects are mainly existing projects, and the availability of funds will directly determine the pace of resumption. It is expected that from late February to early March, the Southern market will focus on replenishing essential needs and fulfilling previous contracts. Traders will purchase as needed, with most transactions being small orders. Regarding social inventories, social inventories in East and South China have increased for three consecutive weeks. Imported cargoes are arriving at ports in a concentrated manner, and there will be some pressure to reduce inventory after the holiday, which may curb a rapid rise in prices.

Northern Market (Shandong, North China, Northeast): Due to temperature constraints, demand for road asphalt generally starts later than in the south, typically waiting for ground temperatures to rise in mid-to-late March. However, demand for waterproof membrane stockpiling is expected to recover first. It is anticipated that by the end of February or early March, some waterproof membrane companies in North China and Shandong will gradually resume purchasing, providing a certain channel for absorbing low-end resources from refineries.

Market outlook

Based on comprehensive assessment, the asphalt market is expected to see a moderate upward trend after the holiday, with initial order prices rising by 50-80 RMB/ton and actual transaction prices following suit by 30-50 RMB/ton. The mainstream transaction price in East China is expected to range from 3,300-3,400 RMB/ton, and in Shandong from 3,200-3,300 RMB/ton, representing an increase of 30-50 RMB/ton compared to before the holiday. However, potential risks include: if crude oil prices fall more than expected during the holiday, or if continued rainy weather in southern China affects the resumption of work after the holiday, the price increase may narrow or even be delayed.

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