Asian Bitumen Supply to Expand, While Demand Remains Uncertain

WPB: The availability of bitumen in Southeast Asia is set to increase in 2025, largely due to a surge in exports from southern China. However, a significant rise in consumption is expected only in select Asian economies next year.

Delayed infrastructure projects from 2024 may fuel short-term purchasing activity. Adverse weather conditions and funding limitations caused setbacks in key markets such as Vietnam, Indonesia, and China last year, with some Indonesian projects being scrapped entirely. Australia’s bitumen demand also remained sluggish due to financial constraints amid high inflation.

In the third quarter of 2024, import costs climbed as demand exceeded supply, further straining the market. Rising prices for high-sulfur fuel oil (HSFO) and shrinking export margins led to a decline in bitumen production across major exporting nations, including Singapore, South Korea, and Thailand, from the second quarter onward.

 Production Recovery Expected in 2025

Market insiders familiar with refining operations in Southeast and Northeast Asia anticipate a return to more stable production levels this year. Increased exports from southern China, particularly from Chambroad’s 80,000 b/d refinery in Hainan, are expected to curb the need for bitumen imports from other regions. Market sources estimate that the Hainan refinery plans to ship out between 400,000-500,000t of bitumen in 2025.

 Additionally, a 270,000 b/d refinery in peninsular Malaysia, which halted bitumen production in mid-2024, is likely to restart operations. Thailand’s 175,000 b/d Map Ta Phut refinery, which prioritized fuel oil output last year, is also set to ramp up bitumen production in 2025, adding to overall supply.

“Given that HSFO and bitumen prices are currently nearly identical, refiners have little incentive to cut bitumen output,” a Southeast Asian trader noted. “However, if demand fails to keep up with supply, adjustments to production might be necessary.”

Meanwhile, Vitol’s bitumen storage facility in Tanjung Bin, Malaysia, with a capacity of 50,000-70,000t, is projected to become operational in 2025. This development is expected to facilitate increased imports and enhance inter-regional trade. However, whether the inventory will primarily serve Asian markets remains uncertain.

 Demand Trends Vary Across the Region

Bitumen consumption projections in China present a mixed outlook. As the country enters the final year of its current five-year economic plan, infrastructure investment—historically a driver of bitumen demand—is expected to be a government focus. Recent monetary policy changes could further support demand. However, uncertainty remains about whether these measures will be sufficient to stabilize the real estate sector. Higher domestic bitumen output is also likely to reduce import requirements.

Vietnam is poised for a significant rise in consumption in 2025, as funding issues that delayed numerous projects in 2024 begin to ease. Some importers predict a 20-30% increase in demand, bringing total consumption to approximately 1.2mn-1.3mn t.

In contrast, Thailand and Malaysia are expected to maintain steady demand levels, with project volumes and government policies remaining largely unchanged from 2024. New Zealand’s bitumen consumption is anticipated to grow by at least 5% year-on-year. However, in Australia, importers foresee a 10% decline due to a lack of large-scale projects and ongoing financial constraints limiting infrastructure maintenance to minor road repairs.

Indonesia is also unlikely to see an increase in bitumen consumption, as infrastructure funding remains tight. Traders indicate that the newly elected government will continue prioritizing social and financial support programs over large-scale construction projects.

 Logistics Challenges to Persist

Limited availability of bitumen-carrying vessels in late 2024 is expected to continue into the first quarter of 2025. Weak demand and reduced production in the latter half of 2024 led to lower liquidity, prompting some vessels to shift operations to other regions.

However, shipping constraints are expected to ease in the latter half of 2025. Market participants report that multiple new vessels, including several 8,000 dead weight tonne (dwt) carriers and a few larger 16,000-17,000 dwt ships, are scheduled for delivery this year. In contrast, there are significantly fewer orders for smaller 5,000 dwt ships, signaling a potential shift toward larger-capacity vessels for transporting bitumen across Asia.

By Bitumenmag

Bitumen, Petroleum, Market, Price