Futures market: Domestic asphalt futures fell sharply today, with the main contract closing at 3,581 RMB/ton, -1.51%, and holding volume of -11,330 lots.

Spot market: Domestic asphalt spot prices fell slightly today. The current mainstream transaction prices for heavy-duty asphalt in various regions of China are 3,770 RMB/ton in East China, 3,590 RMB/ton in Shandong, 3,705 RMB/ton in South China, 4,250 RMB/ton in Northwest China, 3,890 RMB/ton in Northeast China, 3,550 RMB/ton in North China, and 3,815 RMB/ton in Southwest China.

On the supply side: Recently, refineries in Shandong, East China, South China and other regions have stopped production and shifted production, resulting in a further decline in asphalt production load. As of the week ending July 31, 2024, the operating rate of 81 sample companies' refineries in China was 24.8%, a decrease of 1.7% compared to the previous week. The total domestic asphalt production in June was 2.0221 million tons, a month on month decrease of 266,000 tons, a decrease of 11.63%, and a year-on-year decrease of 571,600 tons, a decrease of 22.04%. The total planned domestic asphalt production in July was 2.09 million tons, and the national asphalt production in August was 2.074 million tons, both year-on-year and month on month, showing a decrease.

In terms of demand: Recently, there has been a decrease in rainfall in southern regions and other areas, and the demand for asphalt will recover to some extent. However, there will still be sustained rainfall in northern regions in the future, and the demand for asphalt roads is still limited. Overall, the demand for asphalt remains moderately improved.

In terms of inventory, as of the week of August 1, 2024, the inventory of 54 major asphalt enterprises in China was 1.139 million tons, an increase of 0.6 million tons compared to the previous week. The inventory of 104 domestic traders was 2.589 million tons, a decrease of 23,000 tons compared to the previous week.

The sharp drop in cost dragged down the trend of asphalt, but the low supply of asphalt continued to drive spot inventory, making the performance of asphalt resistant to decline.

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