WPB reports the bitumen market in the Asia-Pacific and the Middle East remains under pressure from oversupply and seasonal weakness in demand. While there is sporadic tendering activity in some locations such as Indonesia and India, the general market remains tempered with high inventories and adverse weather conditions preventing the prices from making a significant comeback.
The pricing environment reflects these tensions. In Singapore, export offers were in the $410–415 per tonne range for cargoes loading in October, but the higher prices of earlier periods failed to attract sufficient buyers. Malaysia's ex-refinery prices were unchanged at $428–430 per tonne, though the balance was tipped by surplus from domestic and Singaporean refiners. Indonesia was more active with buying larger lots of 4,000–5,000 tonnes on the $470–475 per tonne cost-and-freight basis, whereas smaller lots were sold at reduced levels. Thai offers for export, however, remained in the $415–425 range, but there was little buying interest which reflected poor demand.
The north and south of Vietnam posted varying bids in Vietnam, with importers seeking prices of $395–410 per tonne from the north and $430–435 from the south, though heavy monsoon rains discouraged bigger procurement. South Korea saw downward pressure, with export prices dropping to $390–395 per tonne as volumes are being re-routed to Southeast Asia. In China, ex-works Shandong offers were 3,480–3,770 yuan per tonne, and Singapore imports were available at $450–460 delivered to the ports in the south. India was discriminatory in its purchase, taking discriminatory tonnages of VG40 bulk from Iran at around $275–280 per tonne. Iranian bulk sales were at $274–278 per tonne ex-Bandar Abbas, while Iraqi drummed exports were at $340–365 grade dependant.
The excess over demand is at the core of market dynamics today. In Singapore and Malaysia, massive inventories drive sentiment, with short-term short-term opportunities from upcoming refinery maintenance being transitory. Indonesia tenders provided some calm, but the majority of importers opted for a wait-and-see strategy. Thailand preferred its domestic market, leaving export opportunities crippled by incessant rains that postponed road construction. Vietnam's market also suffered due to seasonal rains, with buyers largely inactive and observing only the occasional bid that surfaced. In South Korea, weak Chinese demand forced refiners to redirect shipments towards Southeast Asia, and in China proper, modest northward recovery was neutralized by lackluster activity in the east and south due to financial tightening and weather disruption. Australia and New Zealand experienced a typical seasonal dip during the winter months, apart from some sporadic activity in arid Queensland. India, also still in the shadow of the monsoon, relied exclusively on selective imports prior to experiencing anticipated building momentum once the season improves. Iran's domestic market remained supported by the Iran Mercantile Exchange, even with softening foreign demand, while Iraq coped with reduced purchases by its traditional Indian buyers.
Multiple seasonal and structural factors are shaping short-term views. Refinery maintenance schedules in Southeast Asia and Singapore will tend to mitigate temporarily supply pressures. Damp weather in India, Vietnam, and Thailand, though, persists to limit construction activities. Demand deflation in Australia and New Zealand seasons will not ease until warm seasons set in. Currency pressures gave little relief, with the drop in the US dollar failing to translate into increased demand, as purchasers merely preferred to trade off from existing inventories. Indonesia remained one of the few exceptions, with frequent tenders from western regions sustaining some level of procurement. China's infrastructure activity remains strapped for adequate financing, which keeps overall demand subdued.
In the coming time, bitumen prices will remain trapped in a narrow range. Refinery turnaround, selective tenders, and post-monsoon infrastructure activity in India and Malaysia may offer short-term injections of support, but the interaction of high stocks, seasonal weakness, and structural oversupply will prevent sustained price advances in the near term.
By Bitumenmag
Bitumen, Market, Price
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