Cost greatly affects the asphalt market | Asphalt_Sina Finance_Sina Network

Source: Futures Daily

  Driven by profit recovery and demand improvement,asphaltSupply has rebounded month after month, and it is expected that supply and demand will grow simultaneously in the future. In addition, asphalt futures tend to follow costs down, and the absolute level of the basis will remain at a high level.

  Crude oil market trending down

Asphalt is the residue after the distillation of crude oil and is a refinery product. In theory, the crude oil price trend has a cost guide for the bitumen price trend. Judging from historical data, the long-term correlation between asphalt futures and crude oil futures reached 0.9. The general performance is that the asphalt price trend mainly follows crude oil, and some time, due to the difference between supply and demand, the two are distinguished. Since the middle of this year, SC crude oil has performed strongly, but European and American crude oil have continued to fall, driving the focus of bitumen prices to move down.

Under the sanctions of Europe and the United States, Russian supply is further restricted, and the possibility of major adjustments in OPEC + production policy during the year is low. In addition, there is still no timetable for the return of Iranian supplies. At the moment, the biggest pressure on the demand side comes from a weakening economy. The negative impact of a weaker economy on consumption will gradually emerge The European energy crisis has triggered structural problems in the demand for petroleum products to some extent. From the point of view of the balance of supply and demand, the weakening of demand is relatively certain. The changes in the balance of supply and demand of crude oil mainly depend on the supply side Can Iranian supply return and how much Russian supply constraints have more of impact on the global crude oil market.

Overall, the upward driving force of oil prices is limited. Once the geopolitical factors ease, the driving force of oil prices will begin to exert force, and the cost side in the future will stop the trend of asphalt.

The picture shows the price trend of asphalt and crude oilThe picture shows the price trend of asphalt and crude oil

  Feed B is further increased

The picture shows the monthly output of domestic asphaltThe picture shows the monthly output of domestic asphalt

At the beginning of the year, affected by low profits and low demand, the operating rate and output of domestic asphalt refineries remained lower than the same period of previous years. Since May, with the improvement of the epidemic and the restoration of profits and asphalt demand, the enthusiasm of refinery production has increased. From the beginning of September, the operating rate of the refinery has reached the lower limit of the historical level for the same period. With the recovery of the refinery operating rate, asphalt output increased significantly after July, and the output from July to August was close to the level of the same period last year. Additionally, judging from the refinery’s production scheduling data in September, output will increase further and is expected to reach 2.87 million tonnes, a month-on-month increase of 6.3% and a year-on-year increase of 13.3%. Among them, the output of refining and ground release was 1.961 million tons, a month-on-month increase of 18.13% and a year-on-year increase of 56.35%.

Since the second half of the year, the absolute profit of asphalt refineries has continued to improve, and in mid-August, the comprehensive production profit of the local Shandong refinery once exceeded 600 yuan / ton. From a relative profit perspective, the price difference between diesel and asphalt has widened from month to month, and the absolute price difference is still at a high level in the same period in history, which shows that oil profits have ‘to purify relatively better. than asphalt. Overall, although relative asphalt profits are low, absolute profits and demand are showing a month-on-month recovery trend, which is expected to boost asphalt supply. Asphalt output is expected to continue to increase from September to November.

The figure shows the asphalt refinery's comprehensive profit and operating rateThe figure shows the asphalt refinery’s comprehensive profit and operating rate

  C Traditional demand reaches peak season

This year, the special debt quota was completed ahead of schedule. Against a background of steady growth, investment in infrastructure is supported by policies. According to the requirements of the Ministry of Finance, the issuance of new special bonds this year should be completed by the end of June and used by the end of August. From January to June this year, the cumulative issuance of local government special bonds reached 3.4 trillion yuan, and the cumulative completion progress reached 93%, basically completing the task of issuing special bonds. Local bond issuance in July was dominated by general bond refinancing. The newly added special bonds accounted for 15.6% of total local bond issuance in the month, which mainly invested in building transport infrastructure, construction urban and industrial park infrastructure and affordable housing projects.

The Ministry of Finance said that in the second half of the year, first, it will continue to provide guidance to local governments and encourage areas to do a good job in completing the process of issuing special bonds; the second is to encourage local governments to allocate special bond funds in a timely manner, consolidate the responsibilities of project units, and promote the formation of special bonds as soon as possible. The industry generally believes that using the existing special debt quota will become the next fiscal policy trend. Although the state has given more support to infrastructure investment this year, the overall efficiency is slightly lower in terms of the transition from infrastructure to demand. On the one hand, local government special bonds are mainly used to compensate for fiscal deficits; on the other hand, investment in infrastructure tends to be new infrastructure, with a large proportion of water conservation and public facilities, etc., while the proportion of investment in traditional infrastructure such as roads and railways is relatively small. , the driving effect on demand for steel, cement, asphalt, etc. is weak. In addition, with the exception of asphalt, the prices of paving materials such as cement and gravel have risen significantly this year, which has affected the transformation of infrastructure investment into real demand to some extent. In July, the accumulated investment in infrastructure construction has increased by 9.58% year on year, but the investment in the road transport industry has decreased by 2% year on year, and the apparent demand for asphalt from January to July. has fallen by 26% year on year, showing a split between infrastructure investment and asphalt demand. . From the perspective of the market outlook, investment in infrastructure is still expected, but due to the low efficiency of use and the high price of construction raw materials that prevent the construction of projects, the impact of infrastructure on asphalt consumption is relatively limited.

Demand for roads increases seasonally. Road asphalt use is the main area of ​​asphalt use. At the moment, road asphalt use accounts for 75% of the total asphalt use. During the first half of this year, under the background of the spread of the epidemic and the increasing cost of pavement, the general road construction projects were relatively small and there were many delays to construction projects, and the demand for asphalt roads was slow. From a seasonal perspective, coming into September, with the rainfall range narrowing, highway projects will be concentrated in construction, asphalt use will enter the peak season, and demand will improve , but is expected to be slightly lower than the same. period in previous years.

The demand for waterproofing has been stopped. In recent years, the demand for asphalt waterproofing has grown rapidly. At present, the demand for waterproofing accounts for 20% of the total demand for asphalt. Last year, the cumulative output of bitumen and modified bitumen waterproofing membranes was 2.96 billion square meters, an increase of 18% year on year. Waterproofing membranes are mainly used in the construction of walls, roofs, roads and other fields to prevent leaks. The demand for waterproofing membranes is directly linked to the development of the real estate market. From January to July, the accumulated investment in real estate development fell by 6.4% year on year, and the cumulative area of ​​new house construction fell by 36.1% year on year, which suppressed the demand for waterproofing membranes to some extent, and therefore prevents the waterproofing demand for asphalt. In the context of the general limited growth of the real estate market, the increase in demand for asphalt waterproofing in the second half of the year is also relatively limited.

The photo shows the issue of local government special bondsThe photo shows the issue of local government special bonds
The figure shows the year-on-year comparison of infrastructure investment completion and apparent asphalt consumptionThe figure shows the year-on-year comparison of infrastructure investment completion and apparent asphalt consumption

  D Inventory remains at a medium-low level

According to Longzhong Information sample data statistics, as of September 14, the asphalt inventory has declined for 4 consecutive months, and the total inventory has decreased to 1.638 million tons, of which 70 sample enterprises have a total inventory of 692,000 tons, and 54 sample factories have inventory of 692,000 tons, 946,000 tons. Judging from the data of the last 1 month, the asphalt social inventory is still falling, but the refinery inventory is stable. On the one hand, with improving profits and recovering demand, refinery output has increased; on the other hand, end-use performance is average, and traders are not motivated to stock up and buy more on demand. , which has led to a slowdown in refinery loads compared to the previous period. Looking at the market outlook, under the background of seasonally booming consumption, terminal traders have a certain demand for replenishment, but the current supply of refineries has increased significantly, which has protected the demand for replenishment downstream, so the asphalt inventory is in peak use. the season will remain at a medium-low level.

In summary, profits and demand have been restored, and the supply of asphalt has continued to recover, It is expected that the output from September to November will reach a high level this year. At the same time, starting from September, consumption has entered the traditional peak season, but capital is tight and pavement costs are rising, construction of road projects has been halted to some extent, consumption performance asphalt is average, traders are more careful when buying , and the general inventory is at a low and medium level, and we will pay attention to the peak demand of the season later a degree of achievement. From the point of view of price trends, the one-sided market of asphalt is still driven by cost. The space above crude oil prices is expected to be limited. If the center of gravity of oil prices moves down again, asphalt will follow.(Author: Founder of Medium Term Futures)

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