Since October, the asphalt market has experienced a significant decline. According to monitoring data from Shengyi Society, the ex factory price of heavy-duty asphalt # 70 in Shandong region was 3583 yuan/ton on October 1st, and as of the 17th, the ex factory price in Shandong region was 3370 yuan/ton, a decrease of 5.95%.

Since September, there has been ample supply, and the overall operating level of asphalt production facilities in China remains at a relatively high level. Most local refineries maintain a high level of production enthusiasm, resulting in increased supply pressure in the near future. In terms of production, as of the 17th, domestic asphalt production reached 624000 tons. It is expected that the planned production schedule for asphalt in October will remain high, with a total domestic asphalt production of 2.682 million tons in October.
In terms of demand, some regions in China have concentrated rainfall and typhoon weather, which has hindered terminal demand. In Shandong, due to increased supply and suppressed demand caused by rainfall, inventory accumulation is more obvious. In Northeast China, due to the narrowing of construction windows and traders’ price reductions and promotions, the price advantage of social inventory resources has become apparent. Coupled with the support of rush work demand, the process of destocking has accelerated.
From a cost perspective, crude oil has remained stable since September, but has shown a clear downward trend in October, mainly due to the relatively pessimistic macroeconomic outlook. In the fourth quarter, consumption remains relatively weak, and overall, there is a lack of momentum for the subsequent upward trend of crude oil, resulting in a weak operating trend.
From the perspective of Shengyi Society, the recent operation logic of the asphalt market closely follows that of crude oil, but considering the expectation of incremental demand in the near future, the asphalt market is in a stable stage after a downward trend.