Ambiguity In Bitumen Market !
The last week was dilemmatic for both buyers and sellers of petrochemical markets. There was not a strong demand in the market due to the price fluctuations.
On February 1st, India released new rates of bitumen. It was up by almost 23$, and demand was expected to increase. The escalated prices in India could also lead to an increase in bitumen price in Iran. Although after the jump, Iranian producers preferred not to release any new rates until they find out the latest vacuum bottom (VB) price. The data will be released on 6 February.
Market On Hold
Considering the evidence of IME, the base price of VB may have a decreasing trend by the upcoming announcement of prices. However, rates are expected to increase due to the 5 following facts:
- Huge purchase of VB and bitumen, in addition to more production of refineries. They will compete with each other to keep the price level high.
- Increase of bitumen price in India up to about 23$
- Rising trend of global oil price
- High demand as a result of low purchase in the past months
- A drop in the average price of fuel in the last 7 days
Also, Iran Foreign Affairs Minister proposed coordinated return to the nuclear deal with the USA. If this comes true, we shall expect a sharp decrease of USD value against Iran Rial again. As the attitudes of the two countries are vague regarding foreign policies, expectations are that bitumen prices move in line with market facts and evidence.
The current coup in Myanmar by which Aung San Suu Kyi went through an arrest by the army led to tensions and curfews in the region. Also, the new government of United Stated has threatened to put sanctions against the army of Myanmar that might result in unfavorable economic situation.
Generally, the commodities market is having its quietest days. The fast fluctuations of the prices have confused most of the customers. They have not been able to adjust to the changes. Therefore, all are waiting for a more stable market.
This article was prepared by Razieh Gilani, the sales manager of Infinity Galaxy (www.infinitygalaxy.org).