SunSirs: China Asphalt Market Fluctuation and Consolidation

According to the Commodity Market Analysis System of SunSirs, from March 1st to 8th, the price of asphalt in Shandong Province increased from 3,603 RMB/ton to 3,605 RMB/ton, an increase of 0.04%, a month on month increase of 0.12%, and a year-on-year decrease of 9.01%. The current supply level of asphalt resources is relatively low, and the recovery of asphalt demand is limited. Some southern regions are affected by rainy weather, and demand for shipments generally slows down. Some refineries have high inventory pressure, and the overall market trading atmosphere of the asphalt market is weak.

In terms of supply, the main production enterprises include Xinjiang Meihuite resuming asphalt production, Liaohe Petrochemical stabilizing production, Qilu Petrochemical and Dongming Petrochemical transitioning production, Shandong Shengxing and HSBC Petrochemical stabilizing production, Zhouhe Fengli resuming asphalt production, and Jingbo Hainan stabilizing production, which has driven the utilization rate of refinery capacity in the region to increase. The comprehensive operating rate of the asphalt industry has increased month on month, and there is a bearish impact on the supply side.

On the cost side, in terms of crude oil: The prospect of the Federal Reserve's interest rate cut and signs of rising gasoline demand have supported oil prices. US crude oil inventories increased by 1.4 million barrels to 44,853 million barrels in the middle of the week, with the market estimating an increase of 2.1 million barrels. Guided by bearish news, crude oil has given up some of its gains. As of March 7th, the settlement price of the main contract for Brent crude oil futures was $82.96 per barrel, with no increase or decrease.

On the demand side, the demand for asphalt in the market is slightly light, and rainy weather has hindered the demand for essential goods, resulting in a slightly cold trading atmosphere. The demand side of the asphalt market is bearish.

As of the close of March 7th, the petroleum asphalt futures market has fallen. The main asphalt contract 2406 opened at 3,660 RMB/ton, with a highest price of 3,668 RMB/ton and a lowest price of 3,631 RMB/ton. It closed at 3,633 RMB/ton at the end of the trading day, a decrease of 21% from the previous trading day's settlement, a decrease of 0.57%. The trading volume was 131,774 lots, the holding amount was 259,792 lots, and the daily increase was 20,846 lots.

According to future market forecasts, downstream demand for asphalt has been relatively weak in the near future, and the actual transaction atmosphere is not good. The rainy weather has hindered the demand, and the trading atmosphere is slightly bleak. SunSirs asphalt analysts predict that the domestic asphalt market will be weak in the short term, with consolidation being the main trend.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.