SunSirs: Affected by the Cost Side, the Asphalt Market Continued to Fall and Then Rose Slightly

Price trend

The asphalt market continued its decline last week, before rebounding slightly on Friday. According to data from SunSirs, the ex-factory price of heavy traffic asphalt 70# in Shandong province was 3,370 RMB/ton on October 17th. As of the 24th, the ex-factory price in Shandong province was 3,340 RMB/ton, a decrease of 0.89%.

Analysis review

Costs continued to drive prices lower in the first half of the week, with crude oil rising over 2% on Friday. This strong boost from the cost side pushed asphalt prices higher. On the supply side, ample supply has been observed since September, with overall asphalt production plant utilization rates in China remaining at a moderately high level. Most local refineries maintained high production activity, leading to increased supply pressures in the recent times. Asphalt production reached approximately 550,000 tons during the week, a slight decrease of 11,000 tons month-over-month and an increase of 140,000 tons year-over-year.

On the demand side, projects in Shandong had gradually resumed after the weather improved, and demand had increased significantly. Nationwide, with the temperature dropping in the northwest region and projects nearing completion, demand had been hindered. In the northeast region, due to the narrowing construction window and traders' price cuts and promotions, the price advantage of social inventory resources had become apparent, and the support of rush work had accelerated the destocking process.

Market outlook

According to SunSirs, Shandong Province recently released November delivery contracts, and the market signing situation was still good. As the temperature dropped, demand in the north decreased, while the rigid demand in the south provided support. In the short term, focus on the impact of crude oil on the asphalt market.

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