SunSirs: Narrow Upward Trend in China Asphalt Market

According to the Commodity Market Analysis System of SunSirs, the asphalt market fluctuates narrowly. From January 2nd to 5th, the price of asphalt in Shandong region increased from 3,433 RMB/ton to 3,468 RMB/ton, an increase of 1.00%, a month on month increase of 0.25%, and a year-on-year decrease of 8.96%. There are significant regional differences in the domestic asphalt market, with an overall trend of rising in the south and stabilizing in the north. Asphalt supply continues to decline during the off-season, while downstream demand in some southern regions is concentrated, leading to a tentative increase in asphalt prices. However, high priced transactions are relatively average.

On the supply side, with regard to the main production enterprises, Shandong Shengxing and Shandong RMBrun currently have no production plans, and Jiangsu Xinhai has intermittent shutdowns. In addition, some main refineries have reduced production, and Yunnan Petrochemical has intermittent shutdowns. As a result, the comprehensive operating rate of the asphalt industry has decreased compared to the previous month, which has a positive impact on the supply side.

On the cost side, in terms of crude oil, international crude oil futures prices have weakened and consolidated within the same period. As of January 4th, the settlement price of Brent crude oil futures main contract was $77.59 per barrel, a decrease of $0.66 or 0.8%.

On the demand side, there is a clear north-south differentiation in the demand for asphalt spot goods. Some regions in the south have been supported by rush work and inbound demand, and some have mainly inquired about low-priced resources in Shandong, which has led to a slight increase in prices in Shandong. The overall supply pressure for refineries in the southern region is limited; The demand in the northern region is relatively stable, with more contracts being executed for warehousing, and the demand in the asphalt market is mixed.

As of the close of January 5th, the petroleum asphalt futures market has fallen. The main asphalt contract 2403 opened at 3,712 RMB/ton, with a highest price of 3,717 RMB/ton and a lowest price of 3,672 RMB/ton. It closed at 3,694 RMB/ton in the last trading day, a decrease of 6 RMB/ton from the previous settlement, a decrease of 0.16%. The trading volume was 148,544 lots, and the position was 199,367, with a daily increase of 666.

In the future, it is predicted that the industry's operating rate will increase in the near future, and the demand will vary among regions. The asphalt analyst of SunSirs predicts that the short-term domestic asphalt market will mainly consolidate.

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