In October, the asphalt market experienced a wide decline, with a small number of projects in Shandong terminal rushing to complete, mainly consuming low-priced resources and urgently needing to obtain goods. According to monitoring data from Shengyi Society, the ex factory price of heavy-duty asphalt # 70 in Shandong Province was 3583 yuan/ton on October 1st, and as of October 31st, the ex factory price in Shandong Province was 3223 yuan/ton, a decrease of 10.05%.
The cost side had an impact on the asphalt market situation in the first half of the year. Crude oil continued to decline after the holiday, with a drop of 11% on the 22nd. It stopped falling and rose in the second half of the year, but the market briefly retreated due to demand and contracts continued to decline. On the supply side, since September, there has been ample supply, and the overall operating level of asphalt production facilities in China remains at a medium high level. Most local refineries maintain a high level of production enthusiasm, resulting in increased supply pressure in the near future. The mid week asphalt production was about 550000 tons, a slight decrease of 11000 tons compared to the previous week and an increase of 140000 tons year-on-year.
In terms of demand, as the weather improves in Shandong, projects are gradually coming to an end, mainly relying on low-priced goods. Nationwide, as temperatures drop in the northwest region, projects are coming to an end and demand is hindered. In the northeast region, due to the narrowing of construction windows and traders’ price reductions and promotions, the price advantage of social storage resources is becoming apparent, coupled with the support of rush work demand, and the process of destocking is accelerating.
From the perspective of Shengyi Society, the recent release of November delivery contracts in Shandong region has led to a bottoming out of prices. With the decrease in temperature, the demand in the north has decreased, and the demand in the south has been supported by the urgent need. In the short term, we will pay attention to the impact of crude oil on the asphalt market.