Weekly Bitumen Report: The Russia- Ukraine War and the Concerns in Commodity and Capital Market

The financial and commodity markets of the world experienced a turbulent week, filled with unpredictable fluctuations. Some of the global economists believe that it is probable to face another wave of inflationary stagnation in the world. Considering the current week’s economic situation, it seems that the economic growth of Europe and the rate of production will be negatively affected as a result of the sanctions imposed against Russia.

On the other hand, the probable increase of the rates of energy carriers can lead to the continuity of inflation in the world. Considering these two factors, the assumption of “Inflationary Stagnation” gets stronger. In such a situation, a significant part of the capital will move to safe markets, and the current safe market can be “gold” and its growth is expected.

The record-breaking of crude oil continued in the last week and it exceeded 116 US dollars when Russia invaded Kherson city in Ukraine.

On 2 March 2022, the price of fuel surpassed 557 US dollars and Singapore announced its bulk price at 490 US dollars per ton. In Iran, the range of competitions on vacuum bottom varied from 16.5 – 34 % during the last week. Besides, finalization of the nuclear negotiations was strongly affecting the equity of US dollar against Iran Rial and the FOB price of packed bitumen will outstrip 500 US dollars.

Such a severe and sudden surge of bitumen price might seem to be attractive at first glance but carries the risk of stoppage or fall of export due to high finished costs in the road construction projects.

As it was mentioned in previous articles of Infinity Galaxy, Indian refineries had no choice but to adjust their rates with global markets, as a result after the significant increase on 15 February up to 60 US dollars, another increase of 29.5 US dollars was recorded on 1 March. Hence, the highest increase in bitumen prices within one month was experienced in the India market.  Check the latest bitumen price in India here.

However, considering the current global situations and international crises, the best decision can be instant sales and purchase.

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

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