In August, Asphalt Prices in Shandong Region Fell, Overall Market Trend Declined

August 30 news

Since August, the price of asphalt has been fluctuating and declining due to various factors. According to monitoring data, on August 1st, the factory price of #70 heavy traffic asphalt in Shandong, China was 3,730 CNY per ton, and by the 30th, the ex-factory price in Shandong, China had dropped to 3,660 CNY per ton.

Negative impacts on costs. International crude oil prices continued their downward trend entering August. As of August 29, the main international crude oil futures prices had fallen by 6.73% and 9.57%, respectively, compared to the end of July. This is weighing heavily on asphalt from the cost side.

In August, the downstream demand for asphalt in China was poor, with slow social inventory depletion, and the market had a pessimistic expectation for the demand side. In September, although the construction of projects in some provinces will drive the concentrated release of modified asphalt demand, and the demand for asphalt in both southern and northern markets is expected to increase, the overall improvement in demand may be relatively slow. The supply side is relatively abundant; although the production schedule for August decreased month-over-month, the production enthusiasm of refineries remains high. There is a possibility that the production schedule for asphalt in September could rise, and the production process will still be well-supplied.

Looking at the later period, from a fundamental perspective, the downstream demand for asphalt in China is performing poorly, with social inventory depletion still slow. The market's expectations for the demand side are relatively pessimistic; on the supply side, refineries' production enthusiasm remains high, and there is still a possibility of increased asphalt production in September, with the production process still well-supplied. In terms of costs, the international situation is uncertain, lacking clear guidance. A comprehensive analysis shows that the asphalt spot market in China lacks sufficient positive factors, and currently, the profit margin for asphalt production is relatively good, which means that there may still be room for a downward adjustment in the spot price, and the short-term trend of the spot price is not optimistic.