The construction peak season of Golden September and Silver October saw an overall improvement in supply and demand fundamentals. In early October, the asphalt market was dominated, but due to limited demand and weak cost factors, the asphalt market experienced a slight decline at the end of the month. According to the analysis system of Business Society, the price in Shandong region was 3390 yuan/ton on October 1st, and reached 3522 yuan/ton on October 31st, an increase of 3.89%.

From a cost perspective, the weakening of geopolitical risks, the decline in oil prices, and the neutral fundamentals provide support for prices, and it is expected that the macro level will be boosted. In the short term, an oil price of $72 per barrel is reasonable, and we will focus on macro policies and the recovery of OPEC+production cuts in the future.

In terms of supply, the output in November was 2.35 million tons, an increase of 30000 tons compared to the previous month and a decrease of 430000 tons compared to the same period last year. It is expected that the actual production in October will be around 2.1 million tons, and the actual production in September will be 2 million tons. The average daily production in October was 75000 tons. Due to the significant impact of the resumption of production by Qilu Petrochemical and Beihai Refining, as well as the increase in production by Jinling Petrochemical and Ke Petrochemical, the main focus of production increase is on the main business.

From a demand perspective, there were varying degrees of destocking in different regions in October. The overall inventory reached 1.983 million tons, lower than the average of the past five years.

From a seasonal perspective, November showed a downward trend, and it is expected that the supply-demand imbalance will ease and the price range will shift downwards; From the perspective of Business Society, the short-term supply-demand mismatch provides support for prices, and it is expected that the supply-demand contradiction will ease and the oscillation range will shift downwards from November.