Decline in UK Demand for Bitumen: A Persistent Trend

WPB:The United Kingdom has experienced a significant decline in bitumen consumption, with demand falling by nearly 20 percent in the third quarter of 2024 compared to the same period last year. Data from the UK Department for Energy Security and Net Zero (DESNZ) indicate a 10.4 percent reduction in bitumen use during the first nine months of 2024 compared to the same timeframe in 2023, extending a downward pattern that has persisted since 2021.

In the third quarter of 2024, bitumen consumption amounted to 351,000 tonnes, reflecting a 19.5 percent decrease from the corresponding period in 2023. Over the January-to-September period, total consumption dropped to 1.18 million tonnes. This decline aligns with broader market trends observed over recent years. Between 2021 and 2023, domestic consumption of bitumen in the UK shrank by 16.4 percent, accompanied by a substantial 41.5 percent decrease in production.

Despite the continued contraction in demand, bitumen production in the third quarter of 2024 increased by 6.7 percent year-on-year, reaching 131,000 tonnes. Cumulatively, production for 2024 (up to October) rose by 27.3 percent compared to the same period in 2023, reaching 425,000 tonnes.

The reduction in bitumen consumption forms part of a larger downward trend affecting the UK’s petroleum product sector. Between 2018 and 2023, domestic deliveries of petroleum products dropped by 11.6 percent, while total production fell by 13.9 percent.

Currently, the Eastham refinery is the sole operational facility producing bitumen in the UK, following the cessation of bitumen production at the Lindsey refinery in 2023. However, the decline in UK bitumen production predates this, with a consistent decrease recorded since 2006, leading to increased reliance on imports to meet domestic demand.

Looking ahead, new developments in infrastructure may shape the market. Construction firm Tarmac announced in December that it plans to begin receiving bitumen shipments at the Dagenham terminal in southeast England by late January. The terminal, which has a capacity of 20,000 tonnes, is operated by Puma Energy, a subsidiary of Trafigura.

Nevertheless, market analysts predict that demand for bitumen will remain subdued due to ongoing financial constraints on public infrastructure projects. This outlook, combined with the broader economic pressures on the UK government, suggests that highway spending and construction activity may remain sluggish in the near term.

By WPB
Bitumen, Petroleum, UK, Market