September Sees Mainstream Asphalt Prices Falling in Shandong Region

September 29, News

Since September, asphalt prices have remained volatile and trending downward, influenced by a variety of factors. According to monitoring data, the #70 factory price of heavy-grade asphalt in Shandong region was 3,680 CNY per ton on September 1, dropping to 3,593 CNY per ton by the end of the month on the 29th.

In September, raw material supplies were ample, and most local refineries maintained strong production enthusiasm, driving a week-on-week increase in overall asphalt output. Last week, the capacity utilization rate at China's 92 asphalt refineries reached 42.0%, up 5.7% from the previous week, with weekly asphalt production totaling 701,000 tons—also a 15.5% rise compared to the prior week. Meanwhile, competition among various brands for resources remains intense, keeping supply pressures on asphalt persistently high. Looking ahead, planned asphalt production is expected to remain robust in October, with China’s total output projected at 2.682 million tons for the month.

In terms of demand, concentrated rainfall and typhoon weather in some parts of China have hindered the terminal demand, resulting in a stronger demand for asphalt in the north and a weaker one in the south. In the Shandong region, due to increased supply and demand suppression from rainfall, inventory accumulation is quite noticeable The total social inventory of 104 asphalt enterprises in China amounts to 154.1 tons; in the northeast, as the construction window narrows, traders promote sales through price reductions, making the resource prices in social warehouses more competitive. Coupled with the support of rush demand, the process of destocking has accelerated.

Looking at it, asphalt production has seen a notably sharp increase in the fourth quarter, which could put significant downward pressure on prices after the peak season ends and potentially disrupt the relatively strong market dynamics within the asphalt industry. As a result, we maintain a slightly bearish outlook on fourth-quarter asphalt prices.