SunSirs: The Shandong Asphalt Market Firstly Declined and Then Rose in February

In February 2026, the Shandong asphalt market showed a fluctuating trend of "first decline and then rise". Affected by seasonal factors such as the Spring Festival, supply and demand switching and cost support, it was under pressure and declined before the holiday, and stabilized and rebounded after the holiday. The spot price followed the adjustment of the futures market, and the overall price center rose slightly throughout the month.

Before the Spring Festival: The market was under pressure, and prices fluctuated downwards.

From early February to the Spring Festival (around February 10th), Shandong asphalt was in its traditional off-season, with weak supply and demand leading to a price decline. On February 2nd, the main asphalt futures contract fell by 169 RMB/ton (a drop of 4.87%), causing spot prices to fall from 3,350 RMB/ton to around 3,300 RMB/ton before the holiday.

On the supply side: Domestic asphalt production is projected at 1.936 million tons (down 3.2% month-on-month and 6.5% year-on-year), with Shandong local refineries producing 1.023 million tons (down 3.3% month-on-month). Raw material constraints have led some refineries to switch production, coupled with pre-holiday maintenance, resulting in a capacity utilization rate of 28.08%, with no supply pressure.

The demand side was the core of the downturn: construction was suspended during the Spring Festival holiday, and the operating rate of downstream industries plummeted (2% for modified asphalt and 5% for waterproof membranes). Traders adopted a wait-and-see attitude, and the sluggish transactions dragged down the spot market.

Pre-holiday inventory passively accumulated (still at a low level compared to the same period last year), coupled with the narrowing of asphalt processing profits to 34.57 RMB/ton, refineries were weak in supporting prices, which helped push prices down.

Post-Spring Festival: Demand rebounded, prices stabilized and rose

The market recovered after the holiday (after February 13th), with the futures market rebounding and the spot market recovering. The main contract rose from 3,280 RMB/ton to 3,348 RMB/ton (an increase of 2.07%), and the spot market fluctuated between 3,300-3,380 RMB/ton, which provided support for the spot market.

On the supply side: Shandong refineries were gradually resuming production, the discount of Venezuelan crude oil has narrowed (from $13/barrel to $5/barrel), and improved raw material expectations have raised costs and supported prices.

The recovery in demand is the core of the rebound: rising temperatures have led to the resumption of work, increased purchases by end users and stockpiling by traders, coupled with low inventory levels and tight spot supply, which has pushed prices back up to 3,300 RMB/ton, with a basis of -57 RMB/ton.

On the cost side: Crude oil prices rose due to geopolitical support, the profit margin between asphalt and coking expanded, refineries' willingness to switch production decreased, and stable supply helped the recovery.

Market Outlook:

According to SunSirs, the market in February experienced a "V-shaped" fluctuation, characterized by an initial decline followed by a rise, primarily due to the seasonal shift between peak and off-peak seasons, coupled with support from futures and costs. Looking ahead to March: Refinery production is resuming rapidly, leading to increased supply pressure; demand is recovering as infrastructure projects resume, supporting prices. A volatile upward trend is expected, but caution is advised regarding the risk of a pullback.

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