According to the monitoring of SunSirs, the price of asphalt continues to decline, mainly due to the demand side. Affected by weather factors, downstream terminal demand continues to be sluggish. From December 2 to 9, the average price of asphalt producers in Shandong fell from 3,569 RMB/ton to 3,475 RMB/ton, down 2.64%, 17.89% month on month and 10.6% year on year.
On the cost side, the international crude oil price fell to the lowest level in the year. As of December 7, the settlement price of the main contract of the WTI crude oil futures in the United States was 72.01 dollars/barrel, and the settlement price of the main contract of Brent crude oil futures was 77.17 dollars/barrel. Due to the performance of some US economic data exceeding expectations, the possibility of the Federal Reserve's radical interest rate hike still exists, which suppresses the benefits of OPEC+ production reduction and Western sanctions against Russia. The unexpected growth of the US ISM non manufacturing index in November, released on Monday, reflects that the economy is still resilient. The continued economic boom has triggered market concerns about the Federal Reserve's transition from "dove" to "eagle", which may disappoint the Federal Reserve's desire to slow interest rate hikes. The market provided the basis for the Federal Reserve to curb inflation and maintain the monetary tightening path, which affected the crude oil market to decline significantly. The overall global economy is weak, the prospect of energy demand is still not optimistic, and the economic weakness depresses oil prices. In general, the weak operation of international crude oil can hardly support the refinery cost, and the asphalt cost is negative.
On the supply side, the main manufacturers in Shandong have lowered the ex factory quotation for many times within a week, the range is about 50-100 RMB/ton, and the unit operating rate is generally maintained at 5-60%, mainly maintaining the contract order. At the same time, Qilu Petrochemical switched to residual oil production on December 2, and some major refineries switched to residual oil production on December 6, driving the decline of construction in the region. The refinery's shipment situation is general, and the inventory has increased significantly. However, with the introduction of the winter storage policy, the operators' enthusiasm for stocking up is fair, and the refinery's inventory is expected to decline this week.
On the demand side, due to the drag of demand, traders have poor enthusiasm for entering the market, and most of them purchase on demand. And there is no intention of warehousing for winter storage.
The future forecast shows that the weak operation of international crude oil has limited support for refinery costs, and the domestic demand for spot asphalt and winter storage has some support, but the support is not significant. SunSirs asphalt analysts expect that China domestic asphalt market will remain weak and stable in the short term.
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