The rise in crude oil prices in July is favorable for the asphalt market, with the Shandong asphalt market rising. According to monitoring data from Shengyi Society, the ex factory price of heavy-duty asphalt # 70 in Shandong region was 3670 yuan/ton on July 1st, and as of July 31st, the ex factory price in Shandong region was 3727 yuan/ton, an increase of 1.54%.

From a cost perspective, the increase in prices of raw materials such as crude oil has led to an increase in production costs, which has a certain supporting effect on it. In terms of inventory, due to the impact of the typhoon, some refineries have limited ship shipments and accumulated inventory in their warehouses.
In terms of supply, the operating rate of 92 domestic asphalt refineries is at 35%, an increase from the previous month, with a monthly output of 2.4 million tons. In July, the operating rate of asphalt factories was at the median level in the past five years, indicating a relatively sufficient supply.
On the demand side, weather conditions such as high temperatures and rainfall have affected road construction in some areas, resulting in slow progress of terminal projects. Overall demand for asphalt is relatively low, and downstream users and traders are cautious.
From the perspective of Shengyi Society, in terms of the fundamentals of asphalt, the overall weak supply-demand situation may continue, with funding conflicts and weather conditions such as rainfall affecting the release of terminal demand. The supply side may remain stable, and the operating rate is at the median level in recent years. However, inventory is relatively low and there has been no accumulation signal. The short-term pressure on the market is not significant, but asphalt continues to have insufficient upward momentum.