Bitumen was volatile for about – $ 10 / + $ 10 through the first week of May. The prices in the Middle East experienced a decrease of about $ 10. The bulk bitumen is currently in the range of $ 415 – $ 425 and the new steel drum bitumen is fluctuating in the range of $ 475 – $ 490 for the week.
Many traders are expecting the prices to crash in the near future. However, the market facts are opposing the idea of a price decrease. The inflation, Russia-Ukraine war, freights and shipping problems, demand recovery, and tight supply are stimulating the prices constantly.
The war in Ukraine has caused many tensions in the area and the globe. Ukraine and Russia are both major exporters of food markets, including oil, cereal, and grains. The war has interrupted the export procedure and put the world in danger of scarcity. Moreover, Russia provides a major segment of petroleum and related products. Food and energy crises have risen since the onset of the war and prices are constantly pushing higher.
Inflation, moreover, is the main stimulator of the price in various industries. Economies were just recovering from the covid lockdowns and the war put greater pressure on their shoulders.
Port congestions and vessel shortage is still continuing in several regions. Lockdowns in China have worsened the situation. Shipping companies have faced container shortages and they are not likely to increase their capacity before 2023.
Demand, according to new reports, will be rising in China despite the zero-covid policies. Supply, on the other hand, is still facing disruptions and it might get worse with refineries shutdown, raw material shortages, and oil issues. Therefore, it is irrational to expect the prices to have a severe decrease.
This article was prepared by Mahnaz Golmohammadian, the Content specialist and market analyst of Infinity Galaxy.