Generally speaking, significant changes have occurred in the bitumen
market in the last week. In less than 7 days, the FOB price of
Bandar Abbas surpassed 475 US dollars per ton due to fierce competition on
the vacuum bottom, oil price stability in the 85 channel, and excessive
demand for bitumen. In the event of a vacuum bottom shortage and
refinery competition, it appears that the rising trend will continue,
and the FOB price of Iran will reach $500 per ton in the near future. Respectively, the following are some of the factors that have contributed to the
dramatic rise in global prices:
1. Corona Virus Constraints are reduced
2. Costs of ocean freight have risen as a result, and there is a container shortage.
3. Raffineries are in intense competition.
4. Crude oil price stability in the 85-90 USD range, with a forecast of 90 USD.
5. Increased demand as a result of the commencement of road construction projects
6. The refineries’ reduction of vacuum bottom supply
7. Bitumen prices have risen sharply in Singapore, Bahrain, and Europe.
It’s also worth noting that Iranian producers competed on
vacuum bottom between 15 and 23 percent in the last week,
but many of them failed to purchase any vacuum bottom.
It was also announced that beginning November 8, 2021, shipping lines would
implement a fresh wave of GRI. Furthermore, ocean freight costs in ports
like Mundra may rise by $250 per TEU, causing the market to become more chaotic. The world’s largest conference on bitumen and base oil was held
in Dubai on Wednesday, October 27, 2021, with over 510
participants, demonstrating the market’s enormous potential.
Based on information received from India, Indian refineries may raise the
price of bitumen by over 40 dollars on November 1.
In addition to the above-mentioned items, the issue of Indian terminals
refusing to accept Iran containers in Mundra port has been resolved,
according to an announcement. However, the information has not yet been
made public. In sum, in the current market environment, where the
market is dealing with a rate shock, the best strategy is to proceed with caution.
This article was prepared by Shirin Yosefi, the Content specialist and market analyst of Infinity Galaxy