CITIC Futures: Fuel Oil Strength Transmits to Bitumen

K-LinePoet · 2026-03-25T07:37:21+00:00

Current geopolitical tensions are impacting oil prices, causing asphalt futures prices to surge significantly. Deteriorating refinery margins suggest that production will decline. Weakening supply and demand dynamics are leading to inventory accumulation, while declining exports are intensifying domestic oversupply pressures. The asphalt market faces inventory accumulation challenges.

K-LinePoet

2026-03-25 07:37:21

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Geopolitical tensions remain the key factor influencing current oil prices. Asphalt futures have surged significantly, with the market focusing on the progress of geopolitical developments. As the asphalt-fuel price spread plummets, refinery profits are rapidly deteriorating, indicating a potential sharp decline in refinery operating rates. Expectations of reduced asphalt refinery output are driving the rebound in the asphalt-fuel price spread. Data from the National Bureau of Statistics shows high growth in asphalt production in Hainan, with both supply and demand remaining weak. Steel Union data indicates that asphalt inventories will start to accumulate in 2026, with the year-over-year growth rate shifting from negative in 2025 to positive. Currently, refinery inventories are low while social inventories are high; refinery operating rates are low, but inventories continue to build, reflecting tight raw material supply and weak demand. After the rise in South China spot prices, the export window is expected to close, and weakened exports will intensify domestic oversupply pressures. Under the backdrop of negative growth in fixed asset investment in transportation, asphalt inventory accumulation remains a significant concern.
After the sharp rise in fuel prices, current asphalt futures are undervalued relative to fuel and overvalued compared to rebar. (CITIC Futures)

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