According to WPB, China's bitumen market is heading into November 2026 with plans for higher refinery production as seasonal demand from road construction begins to weaken. Market analysis published on November 4 indicates that planned bitumen output could reach 1.688 million metric tons this month, an increase of 107,500 tons from October. However, the projected volume remains approximately 30.6% below actual production recorded in November 2025, highlighting the continued constraints facing China's bitumen supply despite the anticipated monthly recovery.
The latest production estimate represents an increase of approximately 6.8% from October's planned output of 1.5805 million tons. Nevertheless, the comparison with the previous year reveals a different picture. November's planned production is 743,800 tons below the actual volume recorded during the same month in 2025. The figures suggest that Chinese refiners are preparing to increase output from recent levels, but the market remains substantially below its previous year's production scale.
Production plans vary among the country's major refining groups. PetroChina is expected to produce approximately 323,000 tons of bitumen in November, an increase of 9,500 tons from October. Sinopec's planned production is set to rise by 20,000 tons to 300,000 tons, while CNOOC's output is expected to decline by 10,000 tons to 205,000 tons. Independent and regional refineries account for the largest planned increase, with production scheduled to rise by 88,000 tons to approximately 860,000 tons.
The anticipated supply recovery is partly associated with the resumption of refinery operations and renewed product availability. Dongfang Hualong has reportedly resumed bitumen shipments, while Dongming Petrochemical and Jincheng Petrochemical are preparing to restore deliveries. At the same time, operational adjustments at other facilities continue to influence the supply of heavy petroleum residues used in bitumen production.
Recent operating data support expectations of a gradual recovery. During the week ending October 30, the utilization rate of Chinese bitumen production units increased by 2.08 percentage points to 26.14%. Weekly bitumen production rose by 18,900 tons to approximately 382,740 tons. Both indicators recorded week-on-week improvements, although refinery utilization remains sensitive to feedstock availability and production economics.
However, not all industry production estimates are identical. A separate refinery survey covering 92 facilities projected November bitumen output of approximately 1.635 million tons, up 58,000 tons from October's production plan. The difference highlights variations between industry estimates and reinforces the distinction between planned output and actual production. Final November production will depend on refinery operating schedules, raw material availability, and changing market conditions.
On the demand side, China is entering the seasonal slowdown associated with colder weather. Road construction activity in northern regions is gradually declining as some projects approach completion before winter. In southern China, where weather conditions remain more favorable for paving, demand is recovering more slowly, with purchases mainly supported by immediate construction requirements rather than substantial inventory rebuilding.
Domestic bitumen shipments nevertheless increased during the latest reporting week. Total deliveries reached approximately 270,200 tons in the week ending October 30, an increase of 13,500 tons from the previous week. The rise indicates that some refinery and distribution activity remains active, but it does not necessarily signal a sustained recovery in underlying demand, particularly as higher prices have discouraged additional purchases among traders and contractors.
Demand indicators from downstream industries also point to a softer market. During the same week, the operating rate of modified bitumen production units for road applications increased by 0.8 percentage points to 21%, while the operating rate for bitumen used in waterproofing membrane production declined by one percentage point to 30%. These developments reflect different conditions across end-use sectors, with road construction becoming increasingly exposed to seasonal restrictions.
High bitumen prices have added further pressure on purchasing activity. Some distributors and downstream users have become reluctant to accept expensive spot supplies, particularly where construction schedules are slowing or project requirements can be met through existing inventories. Reduced willingness to purchase at elevated prices may make it more difficult for refiners to maintain sales volumes as additional production enters the market.
Despite the anticipated supply increase, bitumen inventories in China remain relatively low. During the week ending October 30, refinery inventories declined by 49,500 tons to approximately 381,000 tons, while commercial and other offsite inventories decreased by 23,600 tons to 662,700 tons. Both categories remained considerably below their year-earlier levels, indicating that the market has not yet accumulated substantial surplus stocks.
The inventory situation provides an important counterbalance to the weakening demand outlook. If refinery output continues to increase while road construction consumption slows, the rate of inventory drawdowns could decline, eventually allowing stocks to rebuild. However, low starting inventories may limit the immediate impact of additional supply on prices, particularly in regions where product availability remains restricted.
Feedstock constraints are another factor supporting the market. Chinese port inventories of diluted bitumen, a material used in some refinery processing operations, stood at approximately 70,000 tons during the week ending October 30, a historically low level. Tight feedstock availability and elevated crude oil procurement costs can restrict refiners' ability to expand bitumen production, even when operating plans call for higher output.
Price movements in the futures market reflect these competing pressures. In late October, the January 2027 bitumen futures contract advanced from around 4,500 yuan per ton to a high of 5,416 yuan per ton, supported by higher crude oil prices, low inventories, and feedstock supply concerns. More recently, as refinery operations recovered and oil prices retreated from their highs, the contract fell back below 5,000 yuan per ton. These figures refer to futures trading and should not be interpreted as nationwide spot bitumen prices.
The outlook for November therefore reflects a potential shift in China's bitumen supply-demand balance. Higher planned refinery production, combined with declining seasonal consumption, could place downward pressure on domestic prices and slow the pace of inventory reductions. Nevertheless, historically low feedstock availability, limited bitumen inventories, and uncertainty surrounding international crude oil prices may continue to support the market.
For international bitumen traders, these developments are important when evaluating China's changing purchasing requirements. Softer domestic demand and recovering refinery production could affect regional buying decisions, but they do not automatically imply lower import prices or an increase in export availability. Domestic bitumen quotations must be distinguished from international CFR prices, where freight, packaging, product specifications, and delivery conditions play significant roles.
The November outlook suggests that China's bitumen market is moving toward a more balanced supply situation while facing weaker demand from road construction. Whether this shift results in sustained price declines will depend on the actual recovery in refinery production, the pace of winter-related demand reductions, inventory developments, and the availability and cost of refinery feedstocks.
By WPB
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