Weekly Bitumen Report: Record Breaking Bitumen Prices

Within the last week, the market of bitumen was affected by considerable changes. The severe competitions on vacuum bottom, the stability of oil price in the channel of 85 and too much demand to purchase bitumen caused the FOB price of Bandar Abbas to exceed more than 475 US dollar per ton in less than 7 days. It seems that the rising trend will continue and the FOB price of Iran touches the level of 500 US dollar per ton in near future in case of shortage of vacuum bottom and competitions of the refineries.

The below items can be counted as the reasons of dratistic surge of global prices:

1. Reduction of Corona Virus constraints

2. Consequent increase of ocean freight costs and shortage of container

3. Intense competitions among the refineries

4. Stability of crude oil price in the channel of 85 and prediction of 90 US dollar

5. The increase of demand as a result of starting road construction projects

6. The reduction of vacuum bottom supply by the refineries

7. The surge of global prices of bitumen in Singapore, Bahrain, and Europe

In the last week, Iranian producers competed on vacuum bottom around 15 -23 % and still many of them failed to purchase any vacuum bottom.

It was also announced that shipping lines are planning to apply a new wave of GRI from 8 November 2021. Moreover, ocean freight costs in ports like Mundra, might increase 250 US dollar per TEU that will make the market more chaotic. On Wednesday 27 October 2021, the biggest conference of bitumen and base oil was held up with more than 510 participants of this field in Dubai that shows great market‘s potential.

Based on the received updates from India, Indian refineries might increase bitumen price more than 40 US dollar on 1st November.

Also, an announcement show that the issue of Indian terminal avoiding to accept Iran containers in Mundra port has been solved. However, the news has not been published officially yet.

In the current situation that the market is struggling with the shock of rates, the best possible strategy is to follow a cautious and careful pace in the market.

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