Shandong Region Asphalt Market Maintains Stable Operations

August 27 update

Asphalt market prices fluctuated narrowly, with spot prices remaining stable across many regions. August production plans declined compared to the previous month, but it’s important to monitor the output levels of refineries that previously overshot their targets. Meanwhile, there’s increased demand for accelerated project completion in Northwest and Northeast China, while southern regions are experiencing weaker demand due to ongoing rainfall. Notably, shipment volumes from surveyed refineries have climbed by 1 percentage point year-on-year on a cumulative basis. Overall, commercial inventory levels remain relatively manageable, though BU faces pressure amid recent weakness at the cost end—though cracking margins continue to provide some support.

Looking at the fundamentals of asphalt, the overall scenario of weak supply and demand is likely to persist. Factors such as funding constraints and weather conditions like rainfall are expected to delay the release of terminal-level demand. Meanwhile, supply is anticipated to remain stable, with industry startup rates staying at mid-range levels seen in recent years. Notably, inventories remain relatively low, yet there’s no immediate sign of inventory accumulation. As a result, short-term market pressure is unlikely, allowing asphalt prices to stabilize and trade steadily.