Market Analysis

In the first three quarters, the price of domestic asphalt market fluctuated repeatedly, and the price of asphalt market fluctuated upward, from 3,434 RMB/ ton at the beginning of the year to 3,640 RMB/ ton at the end of September. First of all, in 2019, the international crude oil market surged, the Sino US trade relations were uncertain, the crude oil market "black swan" events occurred frequently, OPEC production reduction twisted and turned, the geopolitical situation in the Middle East was pending, many factors affected the oil market, the oil price also showed UPS and downs, twisted and turned, the domestic asphalt market was also cyclical, ups and downs. Secondly, in January and February, the road construction stagnated, there was an increase in the demand for asphalt storage in winter; in April and May, the road engineering was centralized and launched, there was a sharp drop in the price of crude oil, which restricted the upward trend of asphalt; in July and August, the crude oil stabilized and the market sentiment began to improve, the demand of asphalt market was affected by rainfall in many places. On the whole, the first three quarters of the asphalt market mixed with good and negative news, and the asphalt market fluctuated upward, but basically in line with the upward trend of the market price focus in the peak season.

In the fourth quarter, the domestic asphalt market price showed a unilateral downward trend, from 3,640 RMB/ ton to 3,384 RMB/ ton at the end of the year, with a drop of 7.05%. In terms of international crude oil, Saudi Arabia continued to release the signal of production reduction, superimposed on the phased results of Sino-U.S. trade negotiations, the trade environment was expected to be improved, and the oil price continued to rise moderately. However, the overall demand of asphalt market showed a gradual downward trend, and the spot price of domestic asphalt began to fall in October, and the low-cost goods sources of Northeast China and Shandong successively poured into East China, causing further impact on the spot price of East China market. Until the end of November, the overall performance was that traders expected to be pessimistic, mainly in wait-and-see mood, only purchasing on demand, and the pressure gradually emerged. Although the crude oil at the cost end stabilized again in December, the profit of coking material had been better than that of asphalt, and the traders had no intention of replenishing the storage, and the winter storage season was far away. Asphalt bottoming stabilized in December.

Market Forecast

The asphalt analyst of SunSirs believes that the price trend of the asphalt Market in 2019 was generally in line with the trend of the asphalt lean season. During the 13th Five Year Plan period, the total planned investment of the national highway is 9.7 trillion, while from January 2016 to October 2019, the total planned investment of the national highway is 7.8 trillion, accounting for 80% of the plan, and 20% of the plan still needs to be completed. The uncertainty of asphalt price in 2020 still comes from the relationship between crude oil price and asphalt supply and demand. Therefore, it is expected that the price focus of asphalt market will be limited in 2020.

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