At the beginning of last week, the international crude oil price rose driven by the favorable OPEC+ agreement. In the later period, the oil market fell heavily due to the demand of crude oil market and the record high inventory in the United States. The trend of asphalt price followed the crude oil, rising first and then falling. According to the price monitoring data of SunSirs, the asphalt price last week closed at 2,312.50 RMB/ ton, 1.65% higher than that of the previous week.

On June 7, at the OPEC+ ministerial video conference, OPEC agreed to extend its measures to reduce production by 9.7 million barrels/ day for one month until the end of July. U.S. WTI crude oil and Brent crude oil prices topped $40/ barrel and $43/ barrel respectively. In the middle of the week, there was a growing concern that the outbreak would give a second strike to crude oil. Meanwhile, as of the week of June 5, the U.S. crude oil inventory unexpectedly increased by 5.7 million barrels, to a record high of 538 million barrels, and the international oil price dropped. Driven by the crude oil market, the domestic asphalt market price rose first and then fell, but the decline was obviously small.

First of all, Sinopec refinery raised 50-100 RMB/ ton, which led to the increase of market average price. In the second quarter, the consumption of asphalt gradually increased. Fixed asset investment in transportation of all provinces also increased significantly. In May, local government bonds issued 1302.5 billion RMB, the highest amount of local bonds issued in that month. Finally, the total inventory level of asphalt in domestic refineries is 25%, which is 1% lower than the previous week, and the total social inventory rate is 64%, which is 1% lower than the previous week. The increase of asphalt demand effectively supports the price of asphalt, resulting in the decline of asphalt far less than that of crude oil market.

SunSirs analysts believe that the short-term international crude oil price is still facing great downward pressure, which will reduce the production cost of asphalt and suppress the willingness to purchase asphalt. It is expected that the short-term domestic asphalt price will decline slightly.

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