Crude oil plummeting, asphalt market price will enter the downward channel

The impact of the international crude oil market on the $70 / barrel line failed, and the trend of the crude oil market turned downward. At present, the asphalt market is in the off-season, the supply and demand of asphalt are weak, and the asphalt market price will follow the crude oil price. According to the price monitoring data of the business association, the price of asphalt was reported at 3223 yuan / ton on March 19. At present, the overall price of asphalt market is stable, and some regions have started to fall.


On the demand side, March is still the off-season of domestic asphalt market demand. Recently, northern China has experienced sandstorm and cold spring weather. In southern China, rainy weather is in the majority. At present, the operating rate of terminal projects remains low, and the release of rigid demand for asphalt is limited. In addition, crude oil prices have plummeted, and the bearish sentiment of asphalt market is becoming stronger, so the overall asphalt market is still in a weak demand state. On the supply side, before the Spring Festival, the asphalt plant of each refinery was shut down for maintenance, and the asphalt plant operation rate remained at a low level; so far, the asphalt operation rate has not rebounded significantly, and the asphalt operation rate in Shandong is at a low level of about 26%. According to the data, China’s asphalt production continued to decline to 2.1168 million tons in February, down 443 million tons on a month on month basis. Compared with 3 million tons in the same period of 2019, it is down by about 29%. At present, the domestic asphalt market is weak in both supply and demand. The market price follows the change of international crude oil price.


According to business news agency monitoring, oil prices have been falling for five consecutive trading days. At the macro level, due to the release of water from the Federal Reserve and central banks, inflation expectations continued to rise, US bond yields rose, and the prices of risky assets such as stock markets and commodities were suppressed. On Thursday, the market’s expectation of inflation intensified and the tide of US debt selling hit. The yield of 10-year US debt rose to more than 1.7% for the first time in 14 months. The strengthening of the US dollar led to the decline of the stock index and the sharp drop of oil price. In addition, the pace of global economic recovery was once again dragged down by the epidemic. This time, it mainly came from the European region. The European vaccination process was blocked, which led to the expectation of slower economic recovery, Oil prices are under pressure. WTI and Brent crude oil fell to two-week lows one after another. WTI closed below US $60. WTI crude oil hit the biggest one-day decline in the second half of the year.


Lu Xingjun, an analyst of business news agency, believes that: under the situation of weak supply and demand in asphalt market, the price of asphalt market is following the decline, and the trend of crude oil is obvious. The sharp drop of international crude oil price on March 18 is bound to lower the price center of domestic asphalt market. It is expected that the domestic asphalt price will enter a downward channel in the near future.

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