【1】Market Performance: The BU 2602 contract rose to a high during the day before fluctuating downward, closing at 2,963 with a 0.03% gain. The intraday high was 2,989, while the low was 2,931. Over the past seven days, the contract has gained 0.4%, remaining in a low-range consolidation. The next-month 2603 contract rose 0.07%, maintaining a Contango structure with near-term prices lower than deferred prices.

【2】Spot Market: ① Shandong heavy-duty asphalt spot price stood at 2,920 yuan/ton, down 0.3% from the previous day and 0.7% over seven days. The Shandong basis spread was -43 yuan/ton, narrowing by 31 yuan/ton in a week. ② East China heavy-duty asphalt spot price held steady at 3,150 yuan/ton, with the basis spread at 187 yuan/ton, down 41 yuan/ton over seven days.

【3】Crack Spread: ① The BU-Brent spread recorded -214 yuan/ton, down 25 yuan/ton weekly. The BU main contract gained 0.03%, while Brent rose 0.8% (based on 3 PM closing price). Given oil price uncertainties, asphalt’s role as an oil hedge remains challenging, warranting a cautious stance on crack spreads.

【4】Fundamentals: Latest weekly asphalt production and sales data showed modest performance. While diluted asphalt discounts narrowed, they remain at $12/barrel. Winter storage demand for high-priced supplies remains weak, with buyers favoring competitively priced cargoes. Spot prices fell below 3,000 yuan/ton, fueling bearish sentiment or wait-and-see attitudes toward winter storage pricing. Market focus remains on winter storage trends. BaiChuan data suggests this year’s winter storage price may drop to near five-year lows, fluctuating around 3,000 yuan/ton. Key oil price drivers this week include U.S. sanctions on Venezuela, Russia-Ukraine negotiations, and Fed rate cut expectations, which may influence asphalt’s cost-driven trajectory.

【5】Short-Term Outlook: Fundamentally, prices remain weak, constrained by subdued demand and inventory pressure. Winter storage demand recovery will be critical. Year-end OPEC+ supply hikes may further weigh on oil prices, likely dragging asphalt lower. Technically, asphalt prices continue bottoming out, with sideways movement expected until clearer stabilization signals emerge.

【6】Strategy: Maintain a cautious approach amid weak consolidation.