Global bitumen supplier
Why are bitumen and oil crucial?
Global bitumen supplier : Bitumen is a critical petrochemical product in construction. It is a binder of asphalt for roads, pathways and parking lots. The heavy hydrocarbon is a low-grade complex derived from crude oil. However, it exists naturally and refined. 85% of produced bitumen goes to construction sites for paving surfaces such as roads and highways. Other 15% belongs to the roofing industry. This black and sticky product is a good material to waterproof the roof or walls, in addition to soundproofing function it has.
Some of the largest global bitumen producing countries in the world include China, the United States, Russia and the Middle East.
Global bitumen supplier
These countries are usually the biggest oil exporters in the world as well including Russia. When Russia unofficially ended the partnership with OPEC+ by refusing to cut the oil production, the world expected more turbulence in the market.
“In the following year, Russia will export 830,000 tons of oil products to Tajikistan on a duty-free basis – 260,000 tons of automobile gasoline, 310,000 tons of diesel fuel, 40,000 tons of jet engine fuel,
30,000 tons of heating oil, 40,000 tons of bitumen, 100,000 tons of oil coke and 50,000 tons of liquefied gas.”
The Russian press expressed.
In 2013, Russia and Tajikistan signed an agreement on oil products promising export oil products to Tajikistan without the imposition of duties from Russia. Therefore, Dushanbe could import Russian oil products at a lower price. However, it was not possible to re-export the cargo to other countries.
The agreement allows Dushanbe to import Russian oil products at a lower price, but the document prohibits the re-export of Russian oil to other countries. The Russian Finance Ministry stated that Russia’s crude oil export duty amounts to $42 per tons, with the oil price of $343.4 per tons.
Global bitumen supplier
Bitumen production and trade has been impacted by the pandemic in large scales as the biggest construction sites closed due to the lockdowns and restrictions. Approximately, all the petrochemical products saw negative margins in 2020. We could see some hope in the 4th quarter of the year. Meanwhile, the new variant of coronavirus moved the market downward again.
Bitumen plummeted 19.84% since the beginning of 2020, according to trading on a contract for difference (CFD) of this commodity. The refineries cut runs globally. In Asia, refineries kept the supply quite significantly low to manage the market. By April 2020, countries such as Malaysia and Indonesia started lockdowns but their inventories were full. The instructions stopped as well.
Global bitumen supplier
When Covid-19 was rising at the end of January, the market started the change. At this time of the year, suppliers prepare to provide bitumen in Asia for the upcoming construction season. But then there was a pandemic going on in China and it was under severe restriction. Therefore, the cargoes were redirected to other South Asian countries.
Leading refineries such as Shell Bitumen were impacted by the pandemic as well. The company decided to shut down a couple of integrated plants including south Louisiana refinery. Although, Royal Dutch Shell had planned to reduce its plants to 6 by 2025.
Interest rates and global view
While the economic crash of 2020 related to the pandemic hit the world, courtiers implemented interest rate policies to stimulate the economy. Unemployment rates were getting dangerous in some parts of the world; we were facing a global recession. Governments had to provoke the industries to start production. They decided to lower the interest rates to redirect the money to productive sectors.
The U.S. Federal Reserve changed the interest rate to the lowest point in the years after the recovery of the great recession. It is 0.25% at the moment. Australia decreased the interest rate in separate phases to it reached 0.1%. Other countries followed the same policies as Australia and the U.S to widens their economies and cash flow.
Accordingly, we should expect a bright perspective on constructions globally. Global bitumen suppliers and refineries may increase the capacity and exports, due to the increasing bituminous product demand. Currently, it is detectable that oil industries are getting back to the previous runs before the pandemic, even though we encountered a new modified version of coronavirus.
Global bitumen supplier
A new future
Despite the vast applications of fossil fuels and petrochemical products, a new trend is forming worldwide. The globe is turning to clean energy and renewables. Large bitumen producers and oil refineries are redirecting their procedures toward the new trend of energy gradually. Royal Dutch Shell as one of the largest global bitumen supplier and producer released a statement on how they intend to switch for the clean energy. They nearly supply enough bitumen to pave 500 km of road per day.
“Invests in a core set of uniquely integrated manufacturing sites that are also strategically positioned for the transition to a low-carbon future.” Royal Dutch Shell said. “A key advantage of these core sites will also come from further integration with Shell trading hubs,
and from producing more chemicals and other products that are resilient in a low-carbon future.”
Royal Dutch Shell decided to spend $2bn to $3bn for the “new energies division” between 2021 to 2025 per year. The company plans to become the world’s biggest electricity company by the 2030s.
Some other oil companies have announced their support for investing in renewables, accordingly, they brought about 1% of their budgets into the industry. However, they are still producing more fossil fuels than the Paris Climate Agreement permission.
