Entering September, the domestic asphalt market has successively reached new highs.

As of the close on September 30th, the main contract for asphalt futures closed at 5013 yuan/ton, having previously surged to a historical high of 5928 yuan/ton during trading on September 21st. The spot price is higher. According to data from Shengyi Society, the spot price of asphalt exceeded 6450 yuan/ton on September 20th.

By 2025, the price of asphalt will fluctuate between approximately 3000 to 4000 yuan per ton. At the end of 2025, the price of asphalt fell below 3000 yuan/ton, which means that the price of asphalt has doubled in the past nine months of this year.

Under the rise in asphalt prices, downstream enterprises have raised the prices of asphalt related building materials this year, and some manufacturers have already raised prices three times this year.

For example, Dongfang Yuhong issued a price adjustment letter on September 20th, stating that the price of engineering waterproof products will increase on September 30th and will be adjusted again on October 15th based on the raw material market; According to the price adjustment letter from Keshun Shares, the price of asphalt waterproofing membranes and asphalt waterproofing coatings will be increased by 10%, the price of polymer waterproofing membranes will be increased by 3% -8%, the price of polymer cement waterproofing coatings will be increased by 5% -10%, and the price of other engineering waterproofing products will be increased by 3% -8%.

The price adjustment letter clearly states that the reasons for the price increase are changes in the international geopolitical situation, fluctuations in supply and demand patterns, sustained high international crude oil prices, and repeated record highs in the prices of waterproof materials, especially asphalt.

As an investor, the reporter consulted a company that raised prices for asphalt waterproofing materials, and a relevant person from a listed company confirmed that this was indeed the case.

In March of this year, Keshun Co., Ltd. raised its waterproof material products for the first time. At that time, Keshun Corporation responded to the media by stating that due to the continuous rise in international crude oil prices and changes in market supply and demand, the price of asphalt, the main raw material for waterproofing materials, has risen rapidly, with a cumulative increase of over 10%. Other petrochemical products have also seen varying degrees of increase, and will continue to fluctuate at a high level in the short term.

According to Wu Linlin, an asphalt analyst at Longzhong Information, China entered a construction peak in September, and currently there are some instances of traders being reluctant to sell and restricting goods in the domestic asphalt spot market (mainly in Shandong, East China, and South China). The supply of asphalt resources is tight, coupled with low inventory, the market is in short supply, and traders are reluctant to sell, pushing up prices.

She stated that the surge in spot prices caused by traders' reluctance to sell is not a unified behavior across the region, and is mostly due to selective hoarding by traders with lower holding volumes. Some traders also experience differentiation in fulfilling their orders at high prices.

Shortage of asphalt raw materials

The relevant personnel of the aforementioned listed company stated that the main reason for the price increase of asphalt related products is that the price of asphalt has reached a new high, and the company's costs have risen, so it has to raise prices. Regarding why each company has chosen a 10% increase, he said that each company has its own considerations, possibly because the current price increase is mainly due to the rise in asphalt prices, and the prices at which each company receives goods are similar.

Regarding the different price increases of waterproof products, he told reporters that the main reason is that the price increases of raw materials for various waterproof products are not the same, among which asphalt has the highest price increase.

In this year's semi annual report, Keshun Corporation pointed out that the company's raw materials are all petrochemical products, which are greatly affected by geopolitical conflicts, trade frictions, international crude oil markets, and domestic supply side structural reforms. The company has relatively weak bargaining power over bulk commodities such as asphalt, but has some bargaining power over other raw materials. If the purchase prices of these raw materials fluctuate significantly in the future, it may have an impact on the company's profitability.

According to the reporter's understanding, the production cost of asphalt is mainly calculated by adding markup to the price of Brent crude oil. Calculated at $100 per barrel of Brent crude oil, the production cost of asphalt is approximately $5000 per ton.

Although the current asphalt transaction price has reached 6000 yuan/ton and the refinery has a profit of nearly 1000 yuan/ton, the refinery has not chosen to increase production, but has further reduced production.

According to data from Caixin Securities, from September 17th to September 23rd, the operating rate of China Petroleum's asphalt plants was 23.70%, a decrease of 0.90 percentage points from the previous week. The operating rate during the same period last year was over 40%.

According to the reporter's understanding, although the current profit of asphalt production is already high, the profit of refined oil processing is much higher than that of asphalt, and refineries are more willing to shift their asphalt plants to produce refined oil. In addition, there is still a shortage of heavy raw materials (such as Murray crude oil) suitable for producing asphalt, which has led to an increase in asphalt profits. However, refineries are unwilling to resume large-scale production and increase output.

Mari crude oil is a core export crude oil variety in Venezuela, which is a typical high sulfur heavy crude oil. The asphalt production rate is as high as 50% -60%, and it is the main raw material for asphalt plants. The crude oil asphalt production rate in the Middle East is generally low, with Saudi Arabia's heavy crude oil accounting for about 35%.

According to Longzhong Information, the total asphalt production in China from January to September this year is expected to be 14.011 million tons, a year-on-year decrease of 7.561 million tons or 35.1%.

Winter is the off-season for demand for asphalt building materials. Starting from November, construction on northern roads will gradually stop, and the demand for asphalt at the terminal is expected to decrease.

For this winter, it is uncertain whether the decline in demand for asphalt related materials in the building materials industry can drive down asphalt prices. The main reason for the increase in asphalt prices is the rise in oil prices. If oil prices cannot be lowered, it is difficult for asphalt to be lowered. "Wu Linlin said that the decline in winter demand is a definite negative, but asphalt prices may not necessarily fall sharply.

She believes that the current asphalt market depends on the game between cost, supply contraction, and declining demand. There is still a disturbance in the supply of raw materials in the fourth quarter, and there is currently no clear news. If the supply of Mari crude oil and Middle Eastern crude oil returns to normal in the fourth quarter, the price decline will be relatively rapid; On the contrary, asphalt prices are relatively resistant to decline and have a slower pace of decline.

How to influence downstream

Multiple rounds of price increases for asphalt related building materials have directly raised downstream construction costs.

The domestic demand for asphalt is mainly concentrated in two aspects: road construction and real estate construction. According to data from CSI Futures, the consumption of waterproofing membrane asphalt has gradually declined since 2023, while the consumption of road modified asphalt has been declining since 2020, with a slight rebound in 2025.

In this year's semi annual report, Keshun Corporation pointed out that in recent years, due to multiple factors, the demand in the real estate and infrastructure markets has remained weak, and the number of downstream related engineering projects in China has decreased, resulting in weak market demand for waterproofing and other products. If the future industry demand does not meet expectations, it may have a certain adverse impact on the company's operations and development.

Xu Qizhou, a researcher at the China Construction Bank Training Center (Research Institute), told reporters that road engineering often adopts fixed unit price or fixed total price contracts. For projects with missing adjustment clauses or high triggering thresholds, the incremental costs are mainly borne by construction companies.

He stated that not only new construction projects are affected, but also highway maintenance and urban road repairs are arranged according to annual budgets. The increase in material unit prices means that the corresponding amount of paving mileage that can be completed with the same amount of funds is reduced; However, paving in northern regions will gradually stop after November, and road construction projects that were not completed within the year may be postponed until early spring next year.

In terms of housing construction, according to Xu Qizhou, asphalt based waterproofing membranes and coatings are mainly used for roofs and basements. Waterproofing projects do not account for a high proportion of residential construction costs, and the direct impact of this round of price increases on housing prices is limited. However, against the backdrop of weak real estate demand and continuous cost reduction by development companies, waterproofing enterprises find it difficult to fully transmit costs downstream, resulting in squeezed profit margins.

The roof waterproofing renovation and road repair in urban renewal and renovation of old residential areas simultaneously bear the price increase at both ends of the road and waterproofing, "he said.

According to data from CSI Futures, during the week of September 18th, the construction rate of modified asphalt for domestic roads was 25%, a decrease of 2% compared to the previous week. The construction rate of waterproofing membrane asphalt was 30%, an increase of 0.5% compared to the previous week. The demand for road modified asphalt and waterproofing membrane asphalt is lower than the same period in previous years.

The relevant personnel of the aforementioned listed company stated that the price increase of asphalt related materials will indeed raise downstream construction costs. Therefore, the company he works for has decided to prioritize locking in production capacity and ensuring delivery for long-term partners with good payment credit while generally increasing prices.

Regarding the question of whether the price increase of asphalt related building materials will affect terminal demand, he stated that the domestic demand for asphalt related building materials has been declining year by year, and the price increase is only one aspect. The company has launched a series of measures to cope with market changes.

According to a survey by Longzhong Information, in the face of high spot prices, the actual purchasing pace of terminals is not aggressive, and they generally adopt on-demand replenishment and maintain low inventory operations. The willingness of terminals to stock up is insufficient, and demand release is highly dependent on project progress and funding implementation.