SunSirs: Asphalt Prices Fluctuate Lower but Show Relative Resilience

Spot Market Fundamentals: As of 2:00 p.m. on April 1, the market price for heavy-duty asphalt in Shandong stood at RMB4,420 per ton, while in East China it was RMB 4,680 per ton, down 0.6% month-on-month; in North China, the market price was RMB4,450 per ton, unchanged from the previous month. In South China, the market price was 4,580 RMB /ton, unchanged from the previous period. In Southwest China, the market price was 4,750 RMB /ton, also unchanged from the previous period.

Domestic asphalt production in April is projected at 1.527 million tons, down 22% month-on-month and 33% year-on-year, indicating low refinery supply capacity. The current market is generally characterized by a situation where prices exist but trading activity is scarce. Downstream buyers have limited capacity to absorb price increases, and with significant volatility on the cost side, a wait-and-see sentiment prevails. Price increases are largely driven by geopolitical factors. Looking ahead, once the essential demand for road paving kicks in after April, downstream buyers will have no choice but to purchase at higher prices. Asphalt continues to demonstrate relative resilience compared to other petroleum products.

As of the domestic daytime close on April 1, the price spread between the 06 and 04 contracts stood at 16 RMB/ton, a level not seen in nearly three years. Given seasonal trends, this spread is expected to continue strengthening, potentially opening up opportunities for arbitrage.

In the short term, amid war risks and expectations of tight crude oil supply, coupled with measures to ensure refined oil product supply, the asphalt market is expected to remain volatile but generally firm.

SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.