In October, the Shandong asphalt market saw a significant decline

October 31st News

In October, the asphalt market experienced a significant decline. In Shandong, a few end-user projects accelerated construction efforts, primarily drawing on lower-priced resources to meet immediate demand. According to monitoring data, the ex-factory price of No. 70 heavy-duty asphalt in Shandong stood at 3,583 CNY per ton on October 1, but by October 31, the price had dropped to 3,223 CNY per ton—a decrease of 10.05%.

The cost side influenced the asphalt market situation in the first and mid-October. After the holiday, crude oil prices continued to decline, dropping by as much as 11% by the 22nd. However, prices stabilized and rebounded later in the month. Still, driven by weak demand, the market experienced a brief pullback before contracts resumed their downward trend.

On the supply front, supply has remained ample since September. China's asphalt production facilities continue to operate at a relatively high capacity level—slightly above the industry average. Most regional refineries have maintained strong production enthusiasm, leading to increased supply pressure recently. During the week, weekly asphalt output averaged around 550,000 tons, marking a slight week-on-week decrease of 11,000 tons but still representing a significant year-on-year increase of 140,000 tons.

On the demand side, as weather conditions in Shandong improve, projects are gradually nearing completion, with most supplies coming from lower-priced sources. Nationwide, the northwestern region is also seeing projects wind down amid falling temperatures, leading to a slight slowdown in demand. Meanwhile, in the northeastern region, tighter construction windows and aggressive price cuts by traders have made social inventory resources more competitive. However, boosted by urgent project deadlines driving increased demand, the pace of inventory reduction has accelerated.

Let's look at the recent situation: The Shandong region has released November delivery contracts, with prices reaching a bottom. As temperatures drop, demand in the northern part of China decreases, while the southern part of China is supported by rigid demand. In the short term, attention will be focused on the impact of crude oil on the asphalt market.