Weekly Bitumen Report: The Fragile Stability of the Market

Within the last one week, the market experienced fragile stability due to lack of demand and hence, prices were dropped by some of the suppliers while significant competition was observed among the refineries.
In an overall look, the market was under the influence of the below factors in the recent days of 2021:
Competition on Vacuum Bottom among Iran Bitumen Refineries:
The bitumen factories in Tehran, Tabriz, Isfahan, and Bandar Abbas had a competition of 8-18% on VB purchase, and based on the latest status of vacuum bottom formula in Iran, it will increase around 15 US dollars in Iran within the next 7 days.
India Market Forecast:
It is expected that India will decrease bitumen price by around 40 US Dollars by the first January 2022. The considerable gap between the largest producer and the largest consumer will be a good motivation to see a market with a forward trend.
Omicron:
With 13,154 new cases, India’s Covid count soars over 40% in a day; Omicron tally 961. The outbreak of Omicron was six times more compared to the rate of Delta variant but as a result of proper vaccination of the countries and its symptoms, fewer death cases have been reported. Although the lock downs of Europe, America, and Australia were severe, the latest news shows that the duration of these lock downs was shorter.
Crude Oil:
By the outbreak of Omicron, a sharp fall in oil price was observed from around 85~86 USD to 69~70 US dollars and the markets were stopped. As the fear of this variant reduced among the people, oil prices started to get recovered up to 72-75 US dollars. It seems that the mentioned range is acceptable, till the time of preparing this article, the oil price reached the channel of 79.16 US dollars, without any fundamental analyses, If this trend goes on, so rates of petrochemicals will increase in many parts of the world.
Shipping Lines:
Some of the shipping lines are arranging more vessel to resolve the issue of congestion at Bandar Abbas and Jebel Ali and improvements is being observed. However, the new wave of GRI will be applied too.
Iran & 5+1 (JCPOA):
The nuclear negotiations between Iran and 5+1 countries determined a new deadline till the end of January 2022. The latest reports show that promising results can be expected and it led to the fall of US dollar against the Rial.
Conclusion:
Lack of any serious financial transaction till 4th January 2022, improvement of nuclear negotiations and its effects on the dollar price in Iran and fall of Omicron cases can increase bitumen price and increase of oil price up to 80 US dollars can lead to the increase of bitumen price around 10-15 US dollar after New Year holidays. The gap of rates between Iran and India might push the buyers to purchase goods even though the rates are expected to increase, on the other hand Singapore also increase the rates.
Right now, two scenarios can be expected: growth of the market or doubts in the market to see a weak chain of demand and supply. To reach a specific perspective of the market, the effective factors shall be traced carefully during the next few days.
Infinity Galaxy team wishes everyone a prosperous New Year, full of dynamical and growth in the market.
This article was prepared by Razieh Gilani, the sales manager of Infinity Galaxy (www.infinitygalaxy.org).

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