Weekly Bitumen Report: The More Market Dynamicity to be Expected from First August and Fall of Bitumen Prices in India

During the last week, no special fundamental incident was observed in the international arena whose effects can have a serious impact on the economic trend of the market. The only notable point is the ongoing war of Russia and Ukraine after 155 days. The attacks to western fronts of Ukraine are going on.

On the other hand, Europe increased its interest rate around 0.5% within the last week after 11 years. The reason of this increase lays in the fact of a 8.6 % inflation of Europe in 2022.

Oil price had less fluctuations comparing to the previous weeks. Brent crude oil was fluctuating in the range of 102 – 108 US dollars. The reason of this increase was Russia’s threat against Europe to stop sending its gas there. At the time of preparing this report, it was at the level of 108 US dollars.

The current potential threat of international market is the vast outbreak of COVID_19 in the different countries. However, due to proper vaccination, fewer death rates are expected.

In our last week report, Infinity Galaxy mentioned that considering the fall of vacuum bottom prices up to 16% might lead to a dynamicity in the market although there was a recession in the different regions. Though, some of the markets like India were worried about the drop of bitumen prices by their local refineries, they had purchased more comparing to the previous weeks that can be a sign of the mentioned dynamicity.

The market is waiting for the next announcement of India on first of August regarding its bitumen price and the amount of its reduction that is predicted to be around 20-25 US dollars. The previous estimations were predicting more drops that was decreased by the empowerment of crude oil price.

Given that during the last week and after 16% fall of bitumen price in Iran, when the prices of packed bitumen reached to less than 400 US dollar FOB Bandar Abbas after 6 months, it seems that after India drop in bitumen prices and if there will not be any special fundamental event in the market, there will be an appropriate attraction in the market based on the available prices.

On 27 July, Singapore bulk bitumen was in the range of 553-557 US dollars, with an approximate growth of 10 US dollars and bulk bitumen 60/80 in Korea was 498-502 US dollars that was stable. As a result of Iran fall on bitumen prices, its rates were attractive to other markets so that they are looking for an arbitrage opportunity and they are trying to buy from Iran instead of Singapore.

Considering the downward trend of export during the recent months, the transportation costs are decreasing accordingly and it can be another effective factor of the market dynamicity in addition to the fall of bitumen price.

However, it should be confessed that the market has not found its attractive form yet and the demand is much lower than the expectations.

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