Generally, below factors have affected mainly on the Indian bitumen market condition in May and June:
- Inflation
- Monsoon
- Russia-Ukraine war
Infinity Galaxy, the international bitumen supplier, has published a review on the bitumen market in India in the recent two months of 2022.
In the first fortnight of May 2022, India’s inflation was around 7.04, which decreased compared to the previous month, April 2022.
Altogether, India is a high bitumen consumption country and high inflation can potentially have a bearing on its bitumen market growth.
The very immediate effect of inflation in India’s bitumen market was the reduction in trader’s purchasing power and it made Indian dealers reluctant to buy bitumen.
This reduced the volume of bitumen imported to India in May and June. During the period January to May 2021, India imported 1.70 MT of Bitumen. This year, India’s Bitumen imports decreased by 6% over the same period last year.
In this period, India’s state-owned refineries IOCL, HPCL, and BPCL had to reduce ex-Mumbai bitumen prices by 780 Indian rupees per ton.
Prices of bulk VG10, bulk VG30, drummed VG10-VG30 were at 51000 INR, 52000 INR, 59000 INR respectively, for the first fortnight of May 2022.
On 16th May 2022, BPCL bitumen prices increased by Rs. 240 – 270 PMT since first May 2022.
In the second fortnight of May, also the Indian Rupee’s value against the dollar decreased.
Generally, in May the war between Russia and Ukraine had a great impact on oil prices.
In the beginning of May, the oil prices fluctuated between $104 and $109. Meanwhile, India lowered its bitumen prices despite volatility, but its fuel price increased due to high demand at the beginning of May.
In the second fortnight of May, while the Russia-Ukraine war crossed 100 days, BPCL bitumen prices increased by Rs. 240 – 270 PMT since first May 2022.
In general, with the onset of monsoon, road construction projects in India are stopped and the demand for buying bitumen decreases approximately 30%. That’s why India has reduced its bitumen price, consumption and production.
Due to the experience, considering the slower bitumen consumption expected in this situation, some refineries plan to produce more high-sulfur fuel oil instead of bitumen.
In May 2022 due to the monsoon, the bitumen production which was 509,000 MT decreased compared to April 2022. Also, India’s bitumen consumption has decreased by 8% in May 2022, as compared to last month April 2022.
As the monsoon continued until the second fortnight of June, Bitumen prices in India continued to be weak with demand falling due to heavy rains.
