Bitumen and petrochemicals experienced a volatile week due to a change in freights and the oil market. The FOB rates were almost steady fluctuating in the range of $ -5 / +5. However, CFR changed in many parts after turbulent freights.
After the incident in Jebel Ali port, vessel congestion has been a huge problem for the shipping lines. The traffic has caused delays in shipping line schedules. The cargoes have been on the water longer than expected. Moreover, the freight rates have risen due to the blockage of the harbour. Accordingly, CFR prices of bitumen have risen up to $50 per ton for many regions.
After freight concerns, covid rising cases in eastern and central parts of Asia including China, Thailand, and Indonesia has sparked fears of new restrictions. The US and Europe have reported cases of the new variant of covid as well. New travel restrictions can decrease the demand in countries as it happened in 2020. However, the demand has not changed at the moment and traders are searching for new cargoes. They are just more cautious about their long term decisions and consider the covid possible effects in their plans.
The disputes in the Middle East and Covid concerns affected the oil market as well. Market participants are hesitant about taking new decisions because they are not much sure about the situation. The crude oil market appeared weak for prices above $70.
China’s import level has recovered compared to the last month, however, it is still lower than its records during the same time last year. The country is worried about the new covid cases. Although the numbers are low, it is trying to impose restrictions to avoid an outbreak.
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This article was prepared by Mahnaz Golmohammadian, the Content specialist and market analyst of Infinity Galaxy.