Newsletter summary
Asphalt futures prices fluctuated weakly this week, affected by falling oil prices and the southern rainy season; supply fell, demand rebounded low, inventories continued to increase, profits and losses narrowed but still weak; BU-Brent split spread widened, focusing on OPEC+ meetings and geographical conditions.
Text of news flash
Asphalt futures prices showed a volatile downward trend this week, affected by the fall in international oil prices and the weakening of seasonal demand. ]
In this week's trading, asphalt futures prices showed a weak shock. As a result of the pullback of international oil prices, asphalt prices have also fallen. In addition, the continuous rainy season in the south brings to the downstream constructionDreamcardvideopokeronlineIt has a negative impact, while demand in the north is relatively stable. On the inventory side, although refineries maintain low production, inventory consumption is slow, indicating that the fundamentals of the market are in a weak equilibrium. As of May 17, the main contract for asphalt was quoted at 3675 yuan / ton, a slight decrease of 14 yuan / ton compared with May 10, a decrease of 0%.Dreamcardvideopokeronline.4%.
Total asphalt production has shrunk this week, with refineries reducing production due to seasonal factors and depressed profits. ]
According to the latest figures, China's total asphalt production this week was 445000 tons, down 5 per cent from 468000 tons last week. Specifically, production in East China has increased compared with last week, while production in Shandong has declined. Due to the current off-season demand and limited profits, the operating rate of the refinery remains at a low level, thus reducing the supply pressure of asphalt.
The demand for asphalt is low, especially in South China, indicating that rainfall in the south has had a negative impact on demand. ]
Although asphalt demand has rebounded this week, it is still at a low level as a whole. In southern China, in particular, sales fell sharply from 40, 000 tons last week to 13000 tons this week due to the rainy season. Corporate sales in other regions, such as Northeast and East China, have risen, while sales in Shandong have declined.
Asphalt inventory shows an upward trend, and the mood of receiving goods in the market is not high, resulting in slow inventory digestion. ]
Refinery inventories continued to rise this week, to 829000 tonnes at 27 sample companies, up 2 per cent from last week. Social stocks have also declined slightly, but are still higher than those in the same period last year. In terms of futures inventory, the oil and asphalt futures inventory on May 17 was 64000 tons, and the total futures inventory was 94000 tons, up 6% from the previous month.
Although the profit of asphalt production has narrowed, the market is still under operational pressure. ]
This week, thanks to falling oil prices and refinery prices, Shandong asphalt production gross margin has improved, but the overall market is still at a loss. Although the BU-Brent cracking difference on May 17th is-12.8USD / bbl, indicating that the market is expecting the decline of asphalt price, the improvement of BU-SC and BU-FU cracking difference indicates that the asphalt market still faces some cost support.
In the medium-term outlook, the asphalt market will be affected by a number of factors, including the resumption of US oil sanctions on Venezuela and the possible continuation of OPEC+ 's production reduction policy. ]
From a medium-term perspective, the resumption of US sanctions on Venezuelan oil may lead to the flow of oil to the Chinese market, putting pressure on asphalt prices. At the same time, the decision of the OPEC+ meeting in June will also be the key to affect the price of asphalt. If the production reduction policy continues, the strength of oil prices may further limit the rising space of asphalt prices.