Bitumen Weekly Report: Trade war Affecting Markets

The variant of Delta is breaking out in China and new strict lockdowns are being applied over the country. In some commodities markets, a fall in rates was observed. On the other hand, some countries including Asia-Pacific, Indonesia, Thailand are facing lockdowns as the Delta variant has got severely spread.

In the last days of July, China’s attempts to control the prices of crude oil led to fall. In the middle of the week, it soared to $74 but the downward trend was followed until the time of preparing this report up to $69.  

The IME will announce VB on 7 August. A hike of 10 US dollars can be expected. Although, the finished rates of the products might not be workable by this increase, IME is following the algorithm of crude oil in pricing the rates in the second half of the month. 

A new announcement was published by the shipping lines declaring that new implementation of GRI will happen by 18th August and costs will vary depending on the destination ports. 

An increase of 12 US dollars in bitumen price and decrease of 4.5 US dollar in furnace oil were announced by the Indian refineries on the first of August. As we get to the end of monsoon, buyers are willing to place orders and receive them by the end of August or early September. However, some of them are hesitant as they expect a decrease in rates in Iran as a result of the temporary fall of the dollar against Rial. This cannot be true as the exchange rate is not the only determining factor of bitumen pricing. Besides, this market of exchange rates should be observed in detail for the next coming weeks and by the appointment of the new president in Iran. 

The fall of Brent Crude Oil to 69 US dollar can be interpreted as a trade war between China and the USA. China is attempting to decrease the prices of main commodities imperatively. However, it seems that any changes in the policies and strategies of this war will return the oil price to its previous levels. 

This article was prepared by Razieh Gilani, the sales manager of Infinity Galaxy (www.infinitygalaxy.org).