Weekly Bitumen Report: Confusion of Market

The current week’s report was prepared after the latest conference of Rex Fuels’ Bitumen and Bitumen Modification in Taj Palace, New Delhi.

Infinity Galaxy as the exhibitor of the conference could attend the event to meet all the valued clients and give the speech on the latest status of the bitumen market.

It seems that within the next week market should reach its final decision regarding prices. The reason of approaching such final decision can be:

1. Although there was a small supply of vacuum bottom in Bandar Abbas and Indian buyers have not received their older orders, the Iranian refineries competed 48% on the available 20,000MT vacuum bottom that leading to a significant surge of bitumen prices.

2. By the beginning of the week and as a result of Biden’s threat to release strategic storage of crude oil and accompaniment of some European countries and Japan, oil price fell to 78 US dollars but the threat of OPEC+ countries concerning not to increase the supply, it returned to the level of 80 US dollars once again and at the time of preparing this report, it touched the level of 82 US dollars and seems to get stable in this range for the time being.

Two different scenarios of oil price can be proposed in December:

a) fall of the rate as a result of a surplus of supply within the last months.

b) increase of rates up to 90 US dollars.

It should be mentioned there is no clear estimation that which of them is more probable to happen.

As a result of the approaching cold season in north and northwest of India and the stop of road construction projects, the demand for drums will be lessened and the main importers believe that receiving old orders is the priority but it can be changed depending on market trends and if the rates seem attractive, traders will place new orders.

Based on the news received from India, the issue of Mundra port and policies of Adani policies will be sorted out in the next 2 weeks and the shipping situation will get in order accordingly and delays in delivering the cargoes will be solved too.

There are two opposite points of view about the new prices of Indian refineries:

1. Increase of bitumen price up to 20 US dollars

2. Decrease of rates up to exactly 20 US dollars

In the current situation, all the probable scenarios are parallel with each other and it seems that the market is waiting foe its ultimate decision whether to follow its upward or downward trend.

The balance of the market can happen as a result of rates modifications and stability of rates at the current levels and any revision in transportation costs will lead to a fixed range of bitumen prices.

As the market situation is not showing any clear trend and any of the abovementioned scenarios are portable, Infinity Galaxy advises the buyers to make sure of all the aspects of marine transportations for any new order and follow the “Spot Purchase” strategy.

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