Weekly Bitumen Report: Quiet Market of Bitumen Anticipating New Changes in Coming Weeks

Unlike 2-3 weeks ago, the bitumen market passed quiet days over this week. The exchange rate of USD was still fluctuating in a range of 22,000 – 23,000 Toman. This fluctuation can continue until there is a conclusion on the negotiations between Iran and the USA, it seems that both parties will reach an ultimate result within next week. The presidential election of Iran on 18th June is affecting the atmosphere of these negotiations too and the current government is attempting to make positive progress.

Refineries did not compete seriously on vacuum bottom that can be a sign of low demand from Indian buyers who are the main consumers of Iran bitumen. The natural phenomenon of cyclones in some states of India, partial lockdowns, and the huge gap between Iran’s current prices and workable prices in India can be among the reasons for fewer demands by the importers. They prefer to purchase locally with more appropriate rates at the moment. However, the need to import cannot be denied and importers are willing to import Iraqi bitumen at a more feasible price. The factor of quality should not be ignored as there are suppliers who are offering low prices. However, the low quality of their cargoes caused many importers to face serious issues and fail to fulfill their commitments accordingly.

The Indian refineries also released new rates on 16th May by which IOCL announced an INR 540/MT (USD 7.36) increase while HPCL had a decrease of INR 960/MT (USD 13.10).

Bitumen export reduced in April and May 2021 compared to the same period in 2019 and 2020. Considering the ongoing civil projects in different countries, the anticipation of new changes in the market is not far from mind.