July 31st, according to the news,
In July, the asphalt market in Shandong, China, showed a trend of first rising and then falling. In the early part of the month, supported by firm costs, low inventory, and positive expectations for the peak season, prices surged to the highest point of the month. However, in the middle and late parts of the month, the market was hit by negative factors such as the concentrated resumption of production by refineries, high temperatures and frequent rains that suppressed construction, and weakening crude oil costs, leading to a continuous decline in prices. By the end of the month, prices had fallen to the lowest point of the month, and market sentiment shifted from optimism to cautious pessimism, with the supply and demand situation completely reversing.
In early July, the asphalt market in Shandong, China, saw a recovery in trading and a steady increase in prices. At the beginning of the month, international crude oil was supported by geopolitical factors, providing solid cost support for spot prices. Additionally, due to the concentrated maintenance of local refineries earlier, regional supply was tight, and inventories were low, providing strong fundamental support. At the same time, expectations for a peak season in infrastructure construction increased, leading to active restocking by downstream buyers. The stable weather in the first half of the month allowed outdoor construction to proceed smoothly, continuously releasing demand, and multiple positive factors pushed prices to rise steadily.
In late July, the market situation reversed, and the trend continued to weaken. On the supply side, refineries in Shandong that were under maintenance resumed production, leading to a significant release of capacity. Coupled with the influx of external supplies, the market was well-stocked, and refineries continued to accumulate inventory, resulting in a notable increase in supply pressure. On the cost side, the geopolitical premium on crude oil diminished, and prices fluctuated downward, leading to a weakening of cost support and a cooling of bullish sentiment. On the demand side, frequent high temperatures and heavy rainfall in some regions led to a decline in construction activity, and terminal demand fell short of expectations. Downstream buyers only purchased as needed, without any concentrated stockpiling, leading to weak trading. Traders' efforts to reduce inventory by offering discounts further dragged down prices.
At the end of the month, asphalt prices in Shandong were at a low for the month. The market showed a weak pattern with ample supply and weak demand, and trading was sluggish. Merchants mostly followed the market trend, focusing on volume, and there was insufficient momentum for a short-term recovery.
Looking at the future, the overall forecast is for a short-term weak bottoming out and a moderate recovery in the medium term, with no unilateral sharp increases or decreases. In the short term, there will be a weak fluctuation and a small downward probe. Refineries will continue to operate at high levels, ensuring ample supply, and the pressure of inventory accumulation will persist. Hot and rainy weather still hinders outdoor construction, leading to weak demand, and downstream stocking willingness remains low. With crude oil fluctuating widely but with limited upward momentum, asphalt as a whole will maintain a low and weak fluctuation pattern. In the medium to long term, the situation is expected to gradually warm up and shift upwards. As the heat subsides and rainfall decreases, construction conditions will gradually improve, and terminal demand will steadily recover. Coupled with the rising expectations of the "Golden September" peak season, downstream players will stock up in advance, stimulating speculative demand, warming up market transactions, and gradually reducing inventory. Meanwhile, as crude oil trends stabilize, refineries may adjust their operations according to demand, alleviating supply and demand pressures, and the market is expected to see a gradual recovery through fluctuation.
