Bitumen Prices Spike up by 50% on Demand since Last November
Author: HongyuanTime: 2017-03-03
Since December, 2016, bulk prices of bitumen in China went up m-o-m by 50% due to increased demand from related downstream industries, such as waterproofing and road construction. Global bitumen market is faced with the same situation. Bitumen prices in Iran also rose for 43% m-o-m by last November and for 83% from the low levels seen in February, 2016.
Bitumen is derived as a by-product from processing crude oil, and is used extensively in the building and construction sector for road surfacing, waterproofing, and roof insulation. With a boost in infrastructure investment in developing countries, as well as the upcoming OPEC meeting to discuss potential production freezes, bitumen buyers are securing volumes now as they expect a decrease in supplies.
Apart from demand increasing, other main factors which have played a key role in this price rise in bitumen value includes the increase in crude oil value and the limitation in the output of crude by OPEC. While some still hold very little stock of bitumen which they can compromise on its prices and offer lower rates, soon the rates for bitumen 60/70 and bitumen 80/100, once those very minor stocks are depleted, will rise to the expected levels. Bitumen rates can be expected to be at least 300.00USD/MT to 310.00USD on a FOB Bandar Abbas Iran basis in new steel drums of 180 Kg.
Many bitumen buyers will halt their purchase of bitumen and wait to see if the prices of bitumen will come down, however, because OPEC has limited their production of crude, bitumen prices along with crude oil prices will continue to rise.