SunSirs: China Asphalt Market was Sorting Out after Rise

According to the Commodity Market Analysis System of SunSirs, the asphalt market will be sorted out after the market price rises. From July 17th to 21st, the price of asphalt in Shandong fell from 3,809 RMB/ton to 3,801 RMB/ton, a decrease of 0.22%, a month on month increase of 0.62%, and a year-on-year decrease of 10.82%. Typhoon "Taili" is coming, causing some precipitation to increase and affecting downstream demand. In the short term, the market may see a strong demand in the south and weak demand in the north, and the price of asphalt may be adjusted and operated.

On the supply side, in terms of major production enterprises, KPC maintained low load production, Dalian Jinyuan had no production plan, and the intermittent production and production reduction of main refineries in East China led to a decline in the operating rate of units in the region. Hebei Kaiyi's stable production, Dongfang Hualong's resumption of normal production, Shandong Shengxing's stable production, and Yunnan Petrochemical's stable production have led to an increase in the operating rate of units in the region. 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: Affected by the decline in US crude oil inventories and the increase in Chinese crude oil imports, oil prices remain relatively rigid, but concerns about the demand outlook limit the upward trend of oil prices. The settlement price of the main contract for WTI crude oil futures in the United States was $75.65 per barrel, an increase of $0.36 or 0.5%. The settlement price of the Brent crude oil futures main contract was $79.64 per barrel, an increase of $0.18 or 0.2%. The domestic Petroleum industry chain has a positive impact.

On the demand side, the asphalt market demand is relatively flat, with varying demand in different regions. In some northern regions, future rainfall weather may increase, affecting the construction process of downstream terminals. However, the overall demand in the south has improved, and the phased demand may show a strong situation in the south and weak situation in the north. The demand side of the asphalt market has a relatively stable impact.

As of the close of July 21st, the petroleum asphalt futures market has declined. The main asphalt contract 2310 was opened at 3,776 RMB/ton, with a maximum price of 3,803 RMB/ton and a minimum price of 3733 RMB/ton. It closed at 3,759 RMB/ton, down 27% from the previous trading day, with a decrease of 0.71%. The trading volume was 260,803 lots, the position was 371,855 lots, and the daily increase was -2,666 lots.

In the future market forecast, international crude oil has a wide range of fluctuations, with certain cost support, relatively abundant market supply, and strong demand from the south to the north. SunSirs asphalt analysts expect that the short-term domestic asphalt market situation will be mainly sorted out.

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