According to the Commodity Market Analysis System of SunSirs, from May 31 to June 7, the price of asphalt in Shandong Province dropped from 3,572 RMB/ton to 3,549 RMB/ton, a decrease of 0.64%, a month on month decrease of 3.04%, and a year-on-year decrease of 6.04%. There are frequent negative factors on the cost side, and sluggish demand has limited market support. In some regions, asphalt prices continue to decline, and the market transaction atmosphere is poor. Short term asphalt spot prices mainly maintain a weak and stable trend.
On the supply side, the main production enterprises, Shandong Dongming, Shandong Shengxing, and Qilu Petrochemical have successively stopped producing asphalt, Jinling Petrochemical has stopped producing asphalt, and a unit in Xinhai, Hebei has switched to producing asphalt, which has a negative impact on the supply side.
On the cost side, in terms of crude oil: International oil prices have fallen, with the main bearish factors being the gradual cancellation of voluntary production cuts by OPEC+ starting from October, which has raised market concerns about future supply growth and an increase in US gasoline inventories. As of June 6th, the settlement price of Brent crude oil futures main contract was $79.87 per barrel.
On the demand side, downstream terminal demand is weak, and some regions are affected by heavy rainfall weather. The market is mostly dominated by low-priced transactions, but the transaction atmosphere is average, and businesses mainly purchase on demand. The demand side is influenced by bearish factors.
As of the close of June 7th, the petroleum asphalt futures market closed higher. The main asphalt contract 2409 opened at 3,506 RMB/ton, with a highest price of 3,545 RMB/ton and a lowest price of 3,500 RMB/ton. It closed at 3,528 RMB/ton at the end of the day, an increase of 25% or 0.71% compared to the previous trading day's settlement, with a trading volume of 149,376 lots and a holding volume of 306,407 lots, and a daily increase of -2,980.
In the future market forecast, the decline in crude oil prices will weaken the cost side of asphalt. From the demand side, the weather in the northern region is still acceptable or has some support for rigid demand, and demand is expected to slowly recover. However, there are still many rainy weather in the southern region, and overall demand is difficult to improve. SunSirs asphalt analysts predict that the domestic asphalt market will remain weak in the short term.
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