Global Tensions and Agreements
During the last week, the bitumen market faced frequent ups and downs. To be more specific, on 18 March 2022, while crude oil stood at the level of 106 US dollars, in less than one week and until 24 March 2022, it reached 119 US dollars. Such a severe increase after the fall of 11% made the market more ambiguous.
The Russia Ukraine war is passing its fifth week and the military analysts believe that Russia’s military power has decreased and they are mainly bombarding the cities. Considering people’s resistance in Ukraine, the future of this war is vague and its effects on the energy crisis are worrying.
Iran will spend the year-end and New Year holidays from March 18th to 25th, 2022, but based on the analysis received, we expect the new price to be on March 26. Moreover, JCPOA negotiations have been suspended again, allowing both parties to review the terms and see if they can meet each other’s request to return to JCPOA. The result isn’t clear yet, but analysts think it’s more likely. The restored will.
As a result, the US dollar was devalued against Iranian rials during the last few days of the Persian year. Additionally, the sine wave pattern of crude oil has caused turmoil in the markets of importers and exporters of bitumen and other petroleum products. On March 16, 2022, Indian refiners raised the price of bitumen by the US $17, and are expected to stabilize or rise slightly in India on April 1.
Benchmarks and Shipping
March 18, Singapore Bulk Bitumen ($539 / MT) and F.O. Difference CST 180 ($ 595,590) Less than $100. On March 24, these numbers were $541 / MT and $ 693,300, respectively, above $150. Such gaps, which fluctuate frequently throughout the week, maybe known as another sign of market ambiguity, and players in the market role are confident about how to track market trends.
As already mentioned, shipping costs are also increasing as shipping companies charge additional BAF charges from March 15th. Given the serious market ambiguity regarding
crude oil prices and JCPOA negotiations, our company strongly recommend following a “spot cargo” strategy and may not be suitable for long-term investment in the bitumen market.
