Asphalt: demand or improving fundamentals in the third quarter is expected to turn for the better

In the first half of the year, the cost side continued to rise to raise the price of asphalt, but the supply and demand of asphalt was weak, and the low demand for asphalt caused high inventories
.

Asphalt demand is expected to show a seasonal improvement in the third quarter, coupled with the implementation of the diluted asphalt consumption tax policy, some asphalt production capacity may withdraw and refineries may passively reduce their load

Refinery may passively reduce the burden

Since February, the overall operating load of domestic refineries has risen.

However, the upward trend has slowed since the second quarter and remained at around 50%

In addition, the consumption tax policy on diluted bitumen will lead to a decline in the domestic supply of diluted bitumen
.

Judging from the recent domestic imports of diluted bitumen, in order to seize the last opportunity to import diluted bitumen, importers concentrated on handling the import customs clearance business of diluted bitumen in May, which prompted the domestic imports of diluted bitumen to reach 4,155,700 tons in May.
It rose 42.

From the perspective of inventory, in mid-June, domestic port stocks of diluted bitumen reached 2.

724 million tons, a record high in recent years, mainly due to traders hoarding goods

Road construction investment is expected to be less than last year

In the first quarter of 2021, domestic investment in road construction increased significantly year-on-year, but the main reason was the low year-on-year base
.

In 2020, under the background of counter-cyclical growth of infrastructure investment, highway construction investment will perform strongly.
This year, the domestic economy as a whole has entered a normal track, and the overall infrastructure investment is expected to be less than 2020

Rigid demand has recovered

　　Since the second quarter, with the warming of the temperature, road projects in the north and south have been gradually started, and the asphalt just needs to recover.

However, since the beginning of summer, many places in the south have encountered continuous rainfall, and rainfall in some areas in the north is also more frequent, making it difficult to carry out road project construction.
Asphalt demand has just been suppressed, and the overall demand for asphalt in the first half of the year was weak

　　At the same time, since the beginning of this year, asphalt refinery inventories and social inventories have continued to rise
.

Relevant data show that as of the end of June, the inventory ratio of asphalt refineries was around 50%, which was a historical high range for the same period