According to the Commodity Market Analysis System of SunSirs, the domestic asphalt market was operating at a high level in April. From April 1st to 28th, the average producer price of asphalt in Shandong Province increased from 3,578 RMB/ton to 3,680 RMB/ton, an increase of 2.87%, and the price decreased by 3.30% year-on-year.
In the first half of the month, the market showed a strong situation in the north and weak in the south, with prices in many northern regions rising. This was mainly due to the strong operation of international crude oil, which led to an increase in costs, a rise in temperature, and an increase in demand. Business owners were reluctant to sell and forced prices to rise; The prices in the southern region are relatively weak, and the decrease in prices from major production enterprises has driven the market price downward.
In mid month, driven by the rise of international crude oil, cost support strengthened, and asphalt spot prices continued to rise. The demand for spot resources has differentiated, with the temperature in the northern region recovering slowly and the downstream purchasing enthusiasm being limited; The widespread rainfall in the south has hindered the demand for essential goods, and the market transaction atmosphere is average.
In the latter half of the month, there was a slight correction in asphalt prices after an increase. There is a clear north-south differentiation in asphalt spot prices, and Shandong and North China regions have a strong willingness to pull up prices, driving asphalt spot prices to continue to rise. However, the performance of terminal demand in the market is average, and the decline in crude oil weakens the cost support for the asphalt market. After the rise of asphalt spot prices, there is a slight decline, and the market maintains a stable, moderate, and weak operation.
As the end of the month approaches, the spot market is still divided between the north and the south. The weather in the northern region is sunny and the demand for goods is gradually being released. Recently, profits have been restored, and some refineries have released forward contracts. Downstream delivery willingness is still acceptable, but the continuous heavy rainfall in the southern region has hindered terminal demand, and some refineries have implemented batch preferential policies to drive shipments.
On the cost side, the current environment for crude oil is relatively complex, and the performance of oil prices is also relatively stagnant and anxious. Macro and demand are suppressing oil prices in the short term, and the space for further upward movement of oil prices is being suppressed. In addition, given that the current geopolitical tensions have not escalated, crude oil has the potential to mitigate risk premiums and reshape valuation expectations. But the risk has not been lifted, coupled with the start of the North American driving season, gasoline demand is expected to rise, which will provide support for oil prices. Overall, the supply and demand game in the oil market will intensify in the short term, and there is a greater possibility of oil prices maintaining high volatility. As of the close on April 26th, the settlement price of the Brent crude oil futures main contract was $88.21 per barrel, an increase of $0.44 or 0.5%.
On the supply side, Qilu maintains a transition to producing residual oil, while Dongming intermittently produces asphalt, driving a significant decrease in production in the area. Jiangsu Xinhai intermittent production, overall supply pressure still exists; The main production in Xinjiang is relatively stable, but due to the increase in raw material prices, some refining and production plans have been further delayed, resulting in overall low supply; Positive impact on supply side.
On the demand side, the demand for asphalt varies slightly in different regions. The northern market mainly relies on scattered and rigid demand, while the southern region experiences rainy weather, which hinders actual demand. The demand side of the asphalt market has a mixed impact. The demand side of the asphalt market is bearish.
As of the close of April 26th, the petroleum asphalt futures market has risen. The main asphalt contract 2406 opened at 3,772 RMB/ton, with a highest price of 3,788 RMB/ton and a lowest price of 3,755 RMB/ton. It closed at 3,775 RMB/ton in the last trading day, up 16% from the previous settlement day, with a trading volume of 132,389 lots and a holding volume of 134,718 lots, with a daily increase of 5,640.
According to future predictions, both Dongming and Qilu Petrochemical have plans to resume asphalt production, while Dongfang Hualong will resume shipments, resulting in a certain increase in supply. On the demand side, the weather in the northern region is sunny, with an increase in refinery contract shipments at the end of the month. In the southern region, there is frequent rainfall, resulting in lukewarm demand performance. The overall domestic demand is expected to show a slow increasing trend. SunSirs asphalt analysts predict that the short-term asphalt market will remain stable.
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