SunSirs: The Asphalt Market Fluctuates Narrowly

According to SunSirs, the asphalt market fluctuates within a narrow range. From June 1st to 8th, the price of asphalt in Shandong region increased from 3,774 RMB/ton to 3,791 RMB/ton, an increase of 0.44%, a month on month increase of 0.27%, and a year-on-year decrease of 20.82%. The international crude oil market is relatively strong, but downstream demand is still recovering weakly. The ups and downs vary slightly in different regions, and the overall fluctuation is not significant.

On the supply side, the main production enterprises are Liaoning Baolai, Jinling Petrochemical, and Yangzi Petrochemical, which are resuming asphalt production; Jincheng, Huifeng, Haiyou, and Keyuan plan to resume asphalt production from June 10-15;. The comprehensive operating rate of the asphalt industry has increased month on month, with negative impacts on the supply side.

On the cost side, in terms of crude oil, international crude oil prices have rebounded and fluctuated. Affected by the favorable supply of Saudi Arabia's plan to deepen production cuts, the bullish sentiment in the market has diluted the bearish sentiment of rising US refined oil inventories and weak Chinese data. On June 8th, the benchmark price of WTI crude oil for the trading company was 71.74 US dollars per barrel, an increase of 3.28% compared to the beginning of this month (69.46 US dollars per barrel). The domestic Petroleum industry chain is affected by a small positive factor.

On the demand side, the demand for asphalt in the market is relatively flat, with varying demand in different regions. The demand in the northern region is still acceptable, while the rainfall in many southern regions and the rainy season in eastern China are important factors limiting market demand. The overall demand side of the asphalt market is biased towards bearish effects.

As of the close of June 8th, the petroleum asphalt futures market has risen. The main asphalt contract 2308 was opened at 3,752 RMB/ton, with a maximum price of 3,759 RMB/ton and a minimum price of 3,695 RMB/ton. It closed at 3,722 RMB/ton, up 3% or 0.08% from the previous trading day, with a trading volume of 181,066 lots, a holding volume of 134,066 lots, and a daily increase of -3,164 lots.

In the future market forecast, supply will continue to rebound and market prices will remain stable overall. Downstream demand is weak and actual demand is weak. SunSirs asphalt analysts predict that the domestic asphalt market will be mainly weak in the short term.

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