The Transitional Status of the Bitumen Market

The Transitional Status of the Bitumen Market
April 22, 2021
3 minutes

By an overall look at the commodity markets, generally it can be seen the rates were decreasing in Asia. For example, BAPCO, the National Oil Company of Bahrain, decreased its bitumen price up to 10$/Mt in last 4 months!

Aramco in Saudi Arabia was attacked once again by Yemen missiles. The hidden negotiations between Iran and Saudi Arabia to restart the mutual political relations can be seen as a sign of peace in the region.

China is planning to increase the import of crude oil from Iran to a higher level. Although they had a positive economic growth in last 2 years, by this decision and increasing the volume of their import, they can be a determining factor of oil price as a major consumer of oil.

Indian refiners increased bitumen price 17.6$ per ton in the second half of April, but the importers expect to meet a drop in the rates on 1st May 2021, about 700 ~ 1000 INR per ton.

The outbreak of COVID-19 in India is a serious issue and regional and state-wise lockdowns are being imposed in the country. A six-day lockdown was announced in Delhi from 10 P.M tonight to 5 A.M next Monday, Chief Minister Arvind Kejriwal said the move was necessary as rising COVID-19 cases had severely strained the city’s resources and its health system was at a tipping point. This unstable situation has made the buyers hesitant for the new orders and bitumen demand for road construction projects in India is facing a slowdown.

One of the significant issues that buyers will face during the lockdowns is the shortage of labours in many places as workers are not returning from hometowns.

The increase of COVID-19 cases in India affected oil price and it decreased in 2 continuous days, as there is fear of less oil demand in the country which is the third biggest importer of oil in the world.

However, the new wave of lockdown and unequal distribution of vaccine in India did not lead to a considerable drop of bitumen demand in India comparing to the first wave of lockdown that was imposed one year ago.

In Iran, IME announce new VB price on 21st April and a small drop in its rates was observed but as the matter of negotiations between Iran and the USA is getting more and more serious, the exchange rate is following a decreasing trend and this drop of exchange rate fully covers the drop of VB. The fragile market has made the exporters more cautious not to take any risk at the moment as the probable losses will be irrecoverable.

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

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