According to WPB, China’s bitumen market has moved beyond a financial-market rally into a much tighter physical supply environment, with domestic spot prices rising further on August 24, 2026 as refinery operating rates remained unusually low, inventories continued to fall and several producers reduced or halted output.
The national physical-market reference price reached approximately CNY 4,754 per metric ton on August 24, up CNY 31 from the previous assessment. The daily increase was relatively modest at the national level, but regional price movements showed considerably greater pressure. In the Yangtze River Delta, mainstream transactions climbed to around CNY 4,780–4,950 per ton, with the regional midpoint rising by as much as CNY 135 in a single day.
The latest move is important because it differs from the earlier rise in China’s exchange-traded and benchmark indicators. Futures and CFD-linked prices can provide useful information about market expectations, but they do not necessarily represent the price at which physical road bitumen is available from a refinery, terminal or trading storage facility. The latest development is being driven much more directly by product availability.
Supply remains the central problem. China’s refinery operating rate for bitumen fell to approximately 23.43% in the latest weekly assessment. National bitumen production was about 391,000 tons, down 2.74% from the previous week and roughly 33.5% lower than a year earlier. The figures indicate that less than one-quarter of the surveyed bitumen production capacity was operating, leaving the physical market with significantly less flexibility than under normal conditions.
The August production program is also running behind schedule. Refiners had planned approximately 1.701 million tons of bitumen production for the month, but output had reached only about 1.174 million tons by the latest reporting point, equivalent to 69.02% of the planned total. Several facilities remained offline or were operating at reduced rates, raising the possibility that national production will finish August below the original program.
The Yangtze River Delta provides the clearest example of how those production constraints are moving into the physical market. Low output from major refineries and limited commercial inventories have tightened available supply. Some facilities have suspended road deliveries and are prioritizing previously agreed marine contracts, reducing the amount of material immediately available to inland buyers.
That distinction matters to asphalt producers. A refinery can still be producing and shipping bitumen while the local spot market experiences a shortage if most available material has already been committed under previous contracts. Spot availability depends not only on total refinery output but also on how much uncommitted material can actually be released to buyers requiring immediate delivery.
Inventory data reinforce the same message. Stocks held at 54 surveyed refineries were approximately 731,000 tons in the latest assessment, down 4.82% week on week. Commercial inventories across 104 surveyed storage locations stood at around 898,000 tons, down 1.64% from the previous week and approximately 51.5% below the comparable level a year earlier.
The annual decline in commercial inventory is particularly significant. Low stocks reduce the buffer normally available when refinery production temporarily falls. Traders and asphalt producers can absorb short refinery outages when terminals are well supplied, but the same production disruption becomes much more influential when commercial inventories have already been reduced by more than half.
China is therefore entering a tighter phase in which refinery output and inventory are reinforcing each other. Low production is preventing stocks from rebuilding, while low stocks are making each additional production reduction more visible in regional prices.
Regional conditions are not uniform. In Shandong, mainstream prices rose to approximately CNY 4,600–4,720 per ton, supported by tighter refinery supply, although some lower-priced material continued to enter the market. North China remained around CNY 4,680–4,780, while Northeast China moved toward CNY 4,730–4,750. Northwest prices remained firm around CNY 4,820–4,850.
The Yangtze River Delta remains the strongest area, with CNY 4,780–4,950 transactions reflecting particularly tight availability. Refinery road and marine quotations in the region were raised by around CNY 170–200 per ton in some cases. These movements show that the national average of CNY 4,754 conceals substantially different regional supply balances.
Demand is also beginning to improve in parts of the country. Total refinery shipments were approximately 327,300 tons in the latest week, marginally higher than the previous period. Activity in modified-bitumen production also increased, while the end of some weather disruptions and the approach of the traditional road-construction season provided additional support in southern markets.
This makes the current rally more important than a purely cost-driven increase. Higher crude prices have supported refinery costs, but the Chinese market is also experiencing a physical combination of lower production, falling inventories and improving demand. When all three factors move in the same direction, spot prices can remain firm even if crude prices temporarily retreat.
Refinery economics are another important part of the supply problem. Bitumen is competing with other heavy-product routes for refinery feedstock. Recent estimates show production margins for fuel oil and refined transportation fuels above those available from bitumen. When alternative products generate stronger returns, refiners have less economic incentive to maximize road-bitumen production.
This does not mean every Chinese refinery can simply switch bitumen feedstock into diesel or gasoline. Refinery configuration determines what can be done with vacuum residue and other heavy streams. Some facilities have limited conversion capacity and will continue producing bitumen when operating. More complex plants have greater flexibility to direct heavy material toward fuel oil, coking or other upgrading processes.
The current operating-rate data nevertheless show that bitumen production itself is weak. A national run rate near 23.4% is a physical market indicator, not simply a financial-market expectation. Combined with weekly output of only around 391,000 tons and a production program running behind schedule, it provides a much stronger basis for describing the market as tight.
The implications extend beyond China’s domestic road sector.
China is not normally the dominant export supplier to every Asian bitumen market, but changes in Chinese physical availability can affect regional trade flows. When Chinese domestic prices become strong and inventories are low, refiners and traders have less incentive to release material for export. That can remove one potential alternative source at precisely the time other Asian buyers may be looking for replacement cargoes.
India provides a relevant example. Indian buyers have already taken small South China-origin cargoes during 2026 when traditional supply routes became more difficult. If Chinese domestic spot values remain close to CNY 5,000 per ton and local inventories stay low, the economics of releasing additional Chinese cargoes for export could become less attractive.
Southeast Asia could face a similar calculation. Buyers in markets such as Vietnam, Indonesia and Malaysia compare Chinese supply with Singapore, South Korea and other regional origins. A tighter Chinese domestic balance can therefore support regional replacement costs even without China becoming a major exporter.
The distinction between futures and physical supply remains crucial. Shanghai-traded bitumen contracts are physically deliverable and provide an important benchmark for China’s market, but futures pricing still reflects expectations, positioning and broader crude-market sentiment. The CNY 4,754 national spot reference and regional transactions approaching CNY 5,000 show what buyers are confronting in the physical market itself.
That is why the August 24 development represents a different stage of China’s rally. The earlier story was that the benchmark was rising. The current story is that refineries are operating at low rates, monthly production is behind schedule, commercial inventories are more than 50% below last year and some regional buyers are finding fewer immediately available cargoes.
There is still a limit to how far the market can rise without demand resistance. High prices have already made some downstream buyers more cautious, particularly in northern regions where repeated rainfall has slowed project activity. Lower crude prices could also remove part of the cost support. The physical market therefore may not move upward in a straight line.
But supply remains difficult to rebuild quickly. Restarting refinery units, increasing bitumen runs and replenishing commercial inventories all take time. Even if spot demand weakens temporarily because buyers resist high prices, low stocks can keep the market vulnerable to another upward move when road demand strengthens.
For Asian bitumen buyers, the most important signal is therefore not that China’s price has crossed a particular benchmark. It is that the physical supply system behind that price has become less flexible.
With refinery runs around 23.4%, weekly production near 391,000 tons, August output behind plan and commercial inventories roughly half their year-earlier level, China has entered a market in which a relatively small increase in demand can have a much larger impact on price.
The Chinese bitumen rally has therefore moved beyond the futures screen. The pressure is now visible at refinery gates, storage terminals and in regional physical transactions—and that makes the tightening considerably more relevant for the wider Asian bitumen market.
By WPB
News, Bitumen, China, Bitumen Prices, Physical Market, Refinery Runs, Inventory, Yangtze River Delta, Road Bitumen, Asphalt, Refining, Asian Market
