Affected by the new epidemic situation, the global economy will be hit hard in 2020, the performance of international crude oil market will be ups and downs, the breakdown of OPEC + negotiations, ultra scale production reduction, “negative oil price”, and the farce ridden US election will come in droves. In 2020, the domestic asphalt market is directly affected by the collapse of crude oil price, and the asphalt price is greatly reduced, and it has been in the low operation stage in the later stage. According to the price comparison chart of business club in 2018, 2019 and 2020, the asphalt market price in 2020 is far lower than that in 2018 and 2019.
Let’s first review the trend of asphalt Market in 2020
Overall, according to the data of business news agency, as of December 31, 2020, the domestic asphalt price is 2462 yuan / ton, with an annual decrease of 27.23%.
1. In February, China is in the Spring Festival holiday, and the national weather temperature is low, the asphalt market demand is in the traditional off-season, the domestic asphalt supply and demand are weak, the asphalt market price remains stable, and the domestic epidemic has little impact on the asphalt market price. 3. In April, all parts of the country actively resumed work and production, domestic road construction projects are in the preparation stage, and domestic asphalt market demand gradually recovers. However, with the breakdown of OPEC + production reduction agreement negotiation, Russia and Saudi Arabia have a big price war, and Saudi Arabia has issued a statement to increase production on a large scale to gain more market share. The two sides wrestle with each other to return to the negotiation table, and oil prices plummet. The cost of asphalt lost its support, and the domestic asphalt price fell rapidly. In mid May 2020, the price of asphalt fell to the lowest point in the year, with a quotation of 2202 yuan / ton
From June to August, although the epidemic situation was still fermenting, the economy continued to recover, and the oil price entered a relatively stable stage. In July, OPEC + extended a month’s super scale production reduction (9.7 million barrels), and the production reduction scale dropped to 7.7 million barrels / day from August. During this period, oil prices rose and fell, mainly in the range of shocks. In addition, the domestic asphalt road construction projects have been launched one after another, and the domestic asphalt market has ushered in the peak demand season. The double positive support promotes the rebound of domestic asphalt market price.
9. After October, the international crude oil price fluctuated at a low level, which limited the support for the asphalt cost side. In addition, the new production capacity of the asphalt market opens a new round of supply pressure. In addition, the operating rate of refineries continues to rise. Affected by domestic rainfall and floods, the downstream demand is general in the peak season of asphalt demand in 2020, and many other adverse factors, the overall price of asphalt market fell by 7.5% in September and October
After November, with cold weather and stagnant road construction projects, the domestic asphalt market demand entered the off-season, but the new crown vaccine made a major breakthrough. In addition, OPEC + reached a production reduction agreement in early December, which also released a positive signal to the oil market, and the international oil price opened an upward channel. Supported by the cost side of asphalt, domestic asphalt prices rose slightly again, with an overall increase of about 6%.
The monthly rise and fall of asphalt are as follows:
Prospects for 2021
Crude oil demand continues to recover in 2021
The epidemic situation in 2020 has always existed. At present, the world economy in 2021 may still be shrouded in the shadow of the epidemic situation. Although the vaccine has made a major breakthrough and entered the vaccination process, there are still many variables in the current epidemic situation. For example, the number of infected people is still increasing, Europe and the United States are still implementing restrictive measures, and the virus variants also bring new challenges to the vaccine. The most important factor of oil price around 2021 is still demand. Recently, OPEC has lowered its oil demand forecast for 2021 again. Due to the continuous impact of the new epidemic, the rebound speed of global oil demand in 2021 will be slower than previously expected. Its latest monthly report shows that the demand will increase by 5.9 million barrels / day to 95.89 million barrels / day next year. This growth is expected to be 350000 B / D lower than a month ago. The recovery of demand has a long way to go.
The center of gravity of asphalt price rises in 2021
In 2020, the price trend of domestic asphalt market is mainly affected by the price of crude oil, and domestic road construction projects are not affected by the epidemic. With the development of vaccines in various countries, the world economy will gradually recover in 2021, the demand of international crude oil market will continue to improve, or will return to the pre epidemic level, and the rebound of international crude oil price is bound to pull up the domestic asphalt price center. Therefore, it is expected that the price center of domestic asphalt market will rise in 2021 to the level at the beginning of 2020.
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