Asphalt Market Dynamics Report – Recent Commodity Market Intelligence

I. Price Trends
- Futures Prices: On May 22, 2026, the closing price of the benchmark asphalt futures contract stood at RMB 4,500.00 per metric ton, down RMB 14.00 per metric ton (–0.31%) from the previous trading day. The opening price was RMB 4,532.00/ton, with an intraday high of RMB 4,562.00/ton and a low of RMB 4,434.00/ton.
- Spot Prices: As of May 18, 2026, the benchmark spot price for asphalt, as reported by Shengyishe (Business Society), was RMB 4,336.67/ton. The national average asphalt price in April 2026 rose to RMB 4,494/ton, up RMB 310/ton (+7.41% month-on-month). The national average asphalt price in May 2026 is projected to fluctuate within a narrow range of RMB 4,470–4,500/ton at elevated levels.

II. Supply Situation
- Production Schedules: Domestic asphalt production volume scheduled for May 2026 stands at 1.1899 million metric tons, down 22.02% month-on-month — the lowest monthly output level in the past decade. Regional refinery output declined 34.99% year-on-year, while output from integrated state-owned refineries fell 29.36% year-on-year.
- Plant Utilization Rate: As of late April 2026, the national asphalt plant utilization rate declined by 2.2 percentage points month-on-month to 18.3%, 11.5 percentage points lower than the same period last year — the lowest level in recent years.
- Feedstock Supply: Disruptions to navigation through the Strait of Hormuz have contributed to volatile, elevated international crude oil prices, resulting in persistently tight feedstock supply for domestic refineries. Imports of Venezuelan crude oil into China have declined since U.S. intervention intensified; meanwhile, Middle Eastern feedstock supplies have also been affected. Market participants remain concerned about potential feedstock shortages at domestic refineries.

III. Demand Situation
- Downstream Operating Rates: Following the Spring Festival holiday, downstream industries gradually resumed operations, with operating rates across most asphalt-consuming sectors rising. However, road construction asphalt utilization increased only marginally — by just 1 percentage point to 20% — indicating sluggish recovery, remaining at levels seen only in early January.
- Regional Demand: Terminal demand in northern regions is gradually and slowly picking up, whereas southern demand remains suppressed by persistent rainy weather. High asphalt prices are restraining demand realization; delayed project launches have further dampened rigid demand, leading to cautious purchasing sentiment across the market.
- Social Inventory: Overall social inventory of asphalt remains low, and the inventory drawdown inflection point has already emerged. Limited terminal consumption during Q1 led to gradual inventory accumulation; however, year-on-year comparisons show that current social inventory levels are markedly lower than the five-year average. After reaching its peak for the year in early April, social inventory has entered a four-week consecutive drawdown phase.

IV. Key Market Influencing Factors
- Cost Base: International crude oil prices continue to fluctuate at elevated levels, sustaining strong cost support for asphalt. Should geopolitical tensions in the Middle East ease significantly, falling oil prices would weaken this cost support.
- Policy Environment: Growing governmental emphasis on energy efficiency improvements, pollution prevention and control, and circular utilization in the asphalt industry is exerting profound influence on production models, technological innovation, and market orientation.
- Macroeconomic Context: Gradual global economic recovery, coupled with increased infrastructure investment in transportation by numerous countries, is supporting growth in asphalt demand. Nevertheless, macroeconomic uncertainties — both domestic and international — combined with persistently high input costs and weak refinery profitability, continue to keep plant utilization rates near their lowest levels in five years.

Analysis & Assessment
- Supply Side: Asphalt production volumes have dropped sharply, plant utilization remains at historic lows, and feedstock supply constraints persist — collectively providing solid supply-side support. Refineries exhibit low production willingness, especially regional refineries facing high feedstock costs, keeping overall production at low-load operation.
- Demand Side: Downstream operating rates are recovering slowly; high asphalt prices are suppressing demand realization; and southern demand remains hampered by adverse weather. Overall demand remains weak. However, gradually emerging terminal demand in northern regions, together with low social inventory and the onset of inventory drawdown, provide some price support.
- Cost Base: Elevated and volatile international oil prices continue to underpin asphalt costs strongly. Yet, heightened uncertainty surrounding Middle Eastern geopolitics implies that any notable de-escalation could trigger oil price declines, thereby eroding asphalt’s cost support.

Outlook
- Price Trend: Amid robust supply-side support and gradually recovering — albeit price-suppressed — demand, spot asphalt prices are expected to maintain a high-level sideways consolidation pattern. Should Middle Eastern tensions ease markedly and oil prices decline, asphalt’s cost support would weaken, potentially pushing spot prices into a high-level downward consolidation phase — though such a decline would likely lag behind oil price movements.
- Supply-Demand Balance: With incremental terminal demand recovery in northern regions and continued social inventory drawdown, the asphalt supply-demand balance is expected to improve incrementally. However, southern demand remains constrained by rainy weather, implying that overall demand recovery will proceed at a relatively slow pace.
- Market Risks: Close monitoring is warranted for developments regarding Middle Eastern geopolitical dynamics, international oil price volatility, progress in the release of underlying downstream demand, and potential policy adjustments — all of which may materially impact the asphalt market.