According to WPB, China's domestic bitumen market recorded a strong weekly price increase despite recovering refinery production and weakening seasonal demand. The national average price reached 6,259 yuan per metric ton in the week ending October 29, 2026, up 197 yuan from the previous week, a gain reported at approximately 3.3%. The increase was driven primarily by tight immediately available supplies in Shandong and northern China, while refiners in southern regions offered discounts to encourage sales.
The latest figures highlight a widening regional divide in China's bitumen market. In Shandong, limited volumes available for immediate collection prompted stronger buying competition and higher spot prices. North China also experienced notable price increases as nearby supply remained restricted. In contrast, refiners in southern China reduced their selling prices toward the end of October to meet sales targets and move available stocks. As a result, the national price increase did not reflect a uniform recovery across all regional markets.
Higher international crude oil prices provided additional support to bitumen values. Elevated feedstock costs increased the pressure on refiners to maintain selling prices, particularly in regions where physical availability remained limited. However, this cost-driven support coincided with signs of weakening consumption, creating a market in which prices were rising even as demand conditions became less favorable.
On the production side, data covering 92 Chinese bitumen refineries showed that weekly output increased by 23,000 metric tons to 388,000 metric tons. The average capacity utilization rate reached 23.8%, an increase of 1.4 percentage points from the previous week. The recovery followed the resumption of bitumen production at several refineries, including facilities in Shandong, Jiangsu, Fujian, and Henan.
Independent local refineries accounted for approximately 194,000 metric tons of weekly production, an increase of 40,000 tons. Sinopec's output declined by 12,000 tons to 90,000 tons, while PetroChina's production fell by 5,000 tons to 61,000 tons. CNOOC's output remained stable at approximately 43,000 tons. These figures indicate that the overall production increase was concentrated among independent refiners rather than being shared across all major producers.
Despite the production recovery, refinery inventories continued to decline. As of October 29, stocks held at Chinese bitumen refineries totaled approximately 371,000 metric tons, down 6.3% from the previous reporting period and 45.9% below the corresponding level a year earlier. The largest regional reduction occurred in East China, where refinery inventories fell by 15.8%, partly because intermittent production shutdowns coincided with deliveries under existing contracts.
Inventories held outside refineries also decreased. Commercial and other offsite stocks reached approximately 391,000 metric tons, down 5.6% on the previous reporting period and 69.7% year over year. The figures suggest that available inventories remained relatively tight despite increased weekly output. However, lower stocks alone do not establish stronger underlying demand, as inventory movements also reflect production schedules, contract deliveries, and changes in distribution.
Refinery profitability deteriorated during the same period. The estimated average bitumen processing profit declined by 158 yuan to 167 yuan per metric ton. Although bitumen selling prices increased, the rise was insufficient to offset higher feedstock costs. This narrowing margin could affect future production decisions, particularly at refineries with flexibility to adjust their output between bitumen and alternative petroleum products.
Demand indicators presented a mixed picture. Shipments by a sample of 54 Chinese bitumen producers increased by 5.1% to 270,000 metric tons during the week, supported partly by discounted sales and contract deliveries. Southern China recorded particularly strong shipment activity as refiners sought to meet month-end sales targets. Nevertheless, stronger shipments during a single week should not be interpreted as evidence of a sustained recovery in road construction demand.
Seasonal factors are becoming increasingly important. Lower temperatures and unfavorable weather in northern China are gradually restricting road paving operations, while buyers in southern regions remain cautious about purchasing additional material at elevated prices. Many traders and contractors are limiting procurement to immediate project requirements rather than building inventories ahead of the winter slowdown.
Modified bitumen consumption also reflects the softer outlook. The average capacity utilization rate among 69 sampled modified bitumen producers stood at 5.7%, unchanged from the preceding week but 8.9 percentage points lower than a year earlier. Weekly bitumen consumption by these facilities remained approximately 31,000 metric tons, indicating limited growth in this segment despite the broader price rebound.
Looking ahead, planned Chinese bitumen production for November is estimated at approximately 1.635 million metric tons, up 58,000 tons, or 3.7%, from October's planned volume. Actual output will depend on feedstock availability, refinery operating decisions, and market conditions. If production increases while seasonal road construction demand weakens, some regional markets could face renewed selling pressure, even if crude oil prices remain elevated.
For international bitumen traders, the latest developments underscore the importance of distinguishing China's domestic spot market from its import and export quotations. The reported national average of 6,259 yuan per ton represents a domestic market assessment and is not directly comparable with CFR quotations for imported drummed bitumen, which include different packaging, transportation, and commercial conditions.
The immediate market outlook remains divided. Tight physical availability and high feedstock costs continue to support prices in some northern regions, while increasing production, weaker road construction activity, and competitive refinery selling could limit further gains elsewhere. The direction of China's bitumen market in November will depend on how quickly additional output reaches buyers and whether remaining infrastructure demand can absorb the available supply.
By WPB
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