wsopfreechips| Petroleum asphalt: Demand recovery and cracking price drop under the game of supply and demand

News summary

In May, PetroChina's asphalt price rebounded after a shock. Although the national refinery operating rate dropped to 25wsopfreechips.7%, but demand is further released and oil price expectations are boosted, and asphalt prices may experience strong shocks, providing investors with Budo-based cracking spreads and hedging opportunities.

Newsletter text

Petroleum asphalt market demand shows north-south divergence

Since May, despite the experience of petroleum asphalt priceswsopfreechipsThere was a shock, but it showed a rebound trend in late May.

Supply side operating rates declined and output fell somewhat

Due to refinery maintenance, the operating rate of refineries nationwide dropped to 25.7%. In terms of output, the output of independent refineries fell from early May, reaching 234,000 tons.

The demand side is divided from north to south, and demand in the north is gradually picking up

The asphalt market demand is divided between north and south. Demand in the north increases due to rising temperatures, and consumption in the south is sluggish due to the impact of rainy weather.

Inventory accumulation causes price pressure

The total number of factories and warehouses of 54 sample companies across the country has reached 1.193 million tons, which has suppressed downstream willingness to stock goods and put pressure on social inventories.

Profit basis and cost side crude oil prices fluctuated

The asphalt cracking price difference fluctuated downward, while the mainstream asphalt basis difference in Shandong rose again in May. Crude oil prices are mainly volatile based on the confrontation between supply and demand.

Asphalt prices are affected by fluctuations in crude oil prices

Petroleum asphalt prices fluctuate with crude oil prices, and supply and demand are weak. As demand is released, asphalt prices are expected to be supported.

Medium-term layout considers entry at a low position

Considering the release of seasonal demand and the relative stability of oil prices, asphalt prices may be highly volatile. For medium-and long-term layout, low entry levels can be considered.