Report Title - Asphalt: Demand Recovery, Sufficient Supply — 20250711 [1] Report Analysts - Zhang Yongge, Qualification No.: F0282934, Investment Consulting License No.: Z0011351 [2] - Zhang Yanwen, Qualification No.: F03088843 [2] Report Industry Investment Rating - Not provided Core Viewpoints - International oil prices are expected to remain low due to factors such as US sanctions on oil - producing countries and OPEC+ production increases. In the short term, there is uncertainty in the change of asphalt production capacity utilization rate, but overall supply is expected to show an increasing trend. The demand is in the critical period of the "14th Five - Year Plan", with infrastructure projects progressing steadily. The demand in the north may increase after reduced rainfall, while the demand recovery in the south is not obvious. In the short term, asphalt spot prices will mainly remain stable due to the game between cost and demand [5] Summary by Directory Spot Market - **Price**: As of July 10, the reference prices of asphalt in different regions vary. In Shandong, the refinery reference price is 3580 - 3700 yuan/ton, and the main - business reference price is 4050 - 4070 yuan/ton; in East China, the trucking transaction range is 3670 - 3850 yuan/ton; in North China, the heavy - traffic asphalt reference price is 3750 - 3760 yuan/ton; in Northeast China, the mainstream reference price is 3850 - 4080 yuan/ton; in South China, the heavy - traffic asphalt reference price is 3600 - 3680 yuan/ton; in Northwest China, the heavy - traffic asphalt reference price is 3650 - 4350 yuan/ton [3] - **Cost End**: The US plan to impose high tariffs on multiple countries has increased market concerns about demand prospects. The market expects OPEC+ to maintain a large production increase in September, raising concerns about supply surplus [3] - **Supply**: This week, some refineries in the Northwest and Southwest slightly increased production, and major refineries in South China and Shandong resumed asphalt production. The capacity utilization rate of 77 heavy - traffic asphalt enterprises was 32.7%, a 1.0% increase from the previous week. The weekly total asphalt output was 56.7 tons, a decrease of 0.8 tons or 1.4% from the previous week. Next week, Jiangsu Xinhai is expected to resume production, but some refineries in Shandong will continue to switch to producing residual oil, and main - business refineries in East China will operate at low loads [3] Demand - The total shipment volume of domestic asphalt enterprises was 39.8 tons, a 2.6% increase from the previous week. The shipment volume growth in East and Southwest China was prominent. In East China, the main refineries mainly shipped by ship, which increased the shipment volume; in Southwest China, some refineries increased production capacity and sold some goods externally, promoting the increase in shipment volume. The capacity utilization rate of modified asphalt was 14.4%, a 0.4% increase from the previous week. Next week, due to rainfall in some southern regions, the actual rigid demand is limited, while in the north, with less rainfall, market demand is expected to be slightly supported [4] Market Outlook - International oil prices are expected to remain low. The supply may increase, and the demand in the north may be slightly supported after reduced rainfall, while the demand recovery in the south is not obvious. In the short term, asphalt spot prices will mainly remain stable due to the game between cost and demand [5] Data Sources - Steel Union, Longzhong Information, Hongye Financial Research Institute [8][10][12]

1. Report Industry Investment Rating - No relevant content 2. Core View of the Report - Since the US launched a tariff trade war at the beginning of April, the rubber market has declined significantly. However, considering the fundamentals, there is no need to be overly pessimistic. The supply side is at the beginning of the new rubber - tapping season, and it will take time for production to increase. The domestic demand side shows strong tire开工, and the inventory growth in Qingdao is slowing down. The technical price has reached the lower limit of the operating center in the first half of last year, and the probability of further decline in the short - term is low [4][26]. 3. Summary by Relevant Catalogs 3.1 Southeast Asia is about to start tapping, and domestic production is gradually increasing - In terms of supply from rubber - producing countries, according to ANRPC revised data, the rubber production in January 2025 continued the high - yield state of the fourth quarter of last year, with a year - on - year increase of 1.09 million tons. Although the output decreased rapidly in February compared with January, it still had a year - on - year increase of 750,000 tons. The supply during the low - yield season this year is looser than that of last year. It is expected that the data for March and April will also maintain a year - on - year positive state. - Overseas, after the Songkran Festival in Southeast Asian main producing areas, rubber tapping is expected to start gradually. In Thailand, some areas in the north and northeast are in trial tapping, and the south is expected to start normal tapping in late April and increase production in mid - May. In Vietnam, large - scale tapping has not started due to the dry season, and only individual state - owned farms have started trial tapping. - In China, the Yunnan production area is in the transition period of tapping, with slow growth of latex output. The Hainan production area is in the initial stage of tapping, with low overall latex output. Most processing plants have not officially started work, and only state - owned factories have started to purchase latex. It is expected that large - scale tapping will gradually start at the end of April or early May [5]. 3.2 Downstream tire start - up is strong and stable, and the terminal automobile market had a good start in the first quarter - In terms of downstream tire start - up, the overall performance in the first quarter of this year was good, especially in the second half after the Spring Festival. Although it has declined slightly recently due to the US tariff trade war, the start - up rate is still at a relatively high level. Currently, the all - steel tire start - up rate is maintained at 66.15%, and the semi - steel tire start - up rate is maintained at 78.52%, both higher than the best level in the second half of last year. - In terms of tire production, due to the high start - up rate in the first quarter, the tire output in the first two months increased by 15.2% year - on - year, reaching 176.5 million pieces. In terms of tire exports, the exports in January and February both achieved positive growth. Although the export volume in February decreased significantly compared with January, it still had a year - on - year increase of 1.2%. - In the terminal automobile market, in March, the production and sales of automobiles increased by 11.9% and 8.2% year - on - year respectively, and by 42.9% and 37% month - on - month respectively. In the first quarter, the cumulative production and sales of automobiles increased by 14.5% and 11.2% year - on - year respectively. Among them, the production and sales of passenger cars increased significantly, while the performance of commercial vehicles was slightly weaker. The new energy vehicle market continued to heat up, with significant year - on - year and month - on - month increases [8][12][16]. 3.3 The growth of Qingdao inventory is slowing down, and the increase of futures warehouse receipts is stabilizing - According to the domestic inventory data, since the inventory in Qingdao started to increase again in November last year, the inventory has accumulated to a relatively high level. The inventory in Qingdao has increased from 413,000 tons at the beginning of November to 621,000 tons currently, with a cumulative increase of 50.36%. However, the growth rate has slowed down significantly recently, especially in the past two weeks, the increase has been less than 0.5%. - In terms of domestic futures inventory, since March, the warehouse receipts of Shanghai rubber have continued to increase slightly, and the warehouse receipts of 20 - standard rubber futures, which had decreased before, have also increased again. Currently, the increase of Shanghai rubber warehouse receipts has slowed down, with the total amount exceeding 200,000 tons, and the 20 - standard rubber futures warehouse receipts have increased to 77,700 tons, with a steep increase rate [18][20]. 3.4 Summary and Outlook - Since the US launched a tariff trade war at the beginning of April, the rubber market has declined severely. The Shanghai rubber has broken through the high - level operating center since the fourth quarter of last year and reached the lower limit of the operating center in the first half of last year. The maximum phased decline this month was close to 2,900 yuan/ton for Shanghai rubber and more than 2,800 yuan/ton for 20 - standard rubber futures. - The tariff trade war has had a large short - term impact on the confidence of the industrial chain. The US tariff on China has increased to 125%. Although the rubber market has declined significantly recently, there is no need to be overly pessimistic from the perspective of fundamentals. The market may gradually digest the negative news around the 14,000 - yuan mark and wait for the production increase in each production area in the new rubber - tapping season and the further development of the US tariff trade war [24][25][26].

Election Overview - The 2024 U.S. presidential election is scheduled for November 5, 2024, with the new president taking office on January 20, 2025[1] - Current Democratic candidate Kamala Harris is competing against former President Donald Trump, with market expectations favoring Trump's victory[1] Market Impact of Trump and Harris - Trump's policies are expected to boost demand for basic industrial commodities like copper, while negatively impacting gold due to a preference for economic sanctions over military action[2] - If Trump wins, basic metals and agricultural products may see short-term gains, while gold and oil prices could decline[5] Market Reactions Based on Election Outcomes - In the scenario of a Trump victory, basic metals and agricultural products are likely to rise, while gold and oil prices may fall[5] - If Harris wins, the opposite effects are anticipated, with potential for significant market volatility due to her lower winning probability[5] Summary of Potential Outcomes - Trump's full victory could lead to a rise in copper and agricultural products, while gold and oil would likely decline[5] - If Harris wins but the Republican Party retains control, or if Trump wins but the Democrats maintain influence, market trends may reverse from the current "Trump trade" dynamics[3]

Economic Data - In July, China's consumer price index rose by 0.5%[1] - The total retail sales of consumer goods increased by 2.7%[1] - Fixed asset investment grew by 3.6%[1] - Industrial value-added for large enterprises increased by 5.1%[1] Monetary Policy - The People's Bank of China (PBOC) lowered the one-year Loan Prime Rate (LPR) to 3.35% and the five-year LPR to 3.85%, both down by 10 basis points from the previous month[1][4] - The central bank conducted a 149.1 billion yuan reverse repurchase operation with a 7-day rate of 1.70%, maintaining the previous rate[3] Bond Market Performance - On August 20, the 2-year government bond futures contract (TS2409) closed at 102.074, down 0.03%[1] - The 5-year government bond futures contract (TF2412) closed at 104.400, up 0.01%[1] - The 10-year government bond futures contract (T2412) closed at 105.790, up 0.02%[1] - The 30-year government bond futures contract (TL2412) closed at 111.460, up 0.22%[1] Market Sentiment - The overall sentiment in the bond market is positive due to favorable economic data and reduced pressure from the central bank on large banks to sell bonds[4] - Analysts suggest maintaining positions and continuing to observe the market rather than chasing high prices[4]