Bitumen Price
Bitumen Price, Bitumen Weekly Newspaper, And Other Necessary Information
Petronaft offers competitive prices for bitumen, one of the world's most widely used materials. Our specialized factory enable us to establish a direct relationship with our customers, resulting in cost-effective pricing without sacrificing quality. Our production process is based on quality, ensuring that our customers receive the best product possible. We produce bitumen in various types and grades and export it from Iran and the UAE to other countries around the world. We update our bitumen price page weekly with the most commonly used bitumen grades, FOB Bandar Abbas, Iran. For grades not mentioned and other necessary information, our experts are readily available to assist you with your inquiry.
Content Overview
Iran Bitumen Latest Prices
Bitumen prices are updated on a weekly basis
Iran Bitumen Price Update: September 2023
| Bitumen Types | 1st Week | 2nd Week | 3rd Week | 4th Week |
| Bitumen 60/70 Drum (Per Ton) | 400$-405$ | 425$-430$ | 420$-425$ | 415$-420$ |
| Bitumen 60/70 Jumbo Bag (Per Ton) | 390$-395$ | 415$-420$ | 410$-415$ | 405$-410$ |
| Bitumen 60/70 Bulk Bitumen (Per Ton) | 305$-310$ | 330$-335$ | 325$-330$ | 320$-325$ |
| Bitumen 80/100 Drum (Per Ton) | 400$-405$ | 425$-430$ | 420$-435$ | 415$-430$ |
| Bitumen 60/70 Jey Embossed (Per Ton) | 405$-415$ | 430$-440$ | 425$-435$ | 420$-430$ |
| Bitumen 60/70 Pasargad Embossed (Per Ton) | 405$-415$ | 430$-440$ | 425$-435$ | 420$-430$ |
*To ensure you receive an accurate and current quote based on your specific product needs, we encourage you to submit a detailed request.
Iran Bitumen Price Update: August 2023
| Bitumen Types | 1st Week | 2nd Week | 3rd Week | 4th Week |
| Bitumen 60/70 Drum (Per Ton) | 410$-420$ | 410$-420$ | 405$-415$ | 400$-410$ |
| Bitumen 60/70 Jumbo Bag (Per Ton) | 400$-410$ | 400$-410$ | 395$-405$ | 390$-400$ |
| Bitumen 60/70 Bulk Bitumen (Per Ton) | 320$-330$ | 320$-330$ | 315$-325$ | 310$-320$ |
| Bitumen 80/100 Drum (Per Ton) | 410$-420$ | 410$-420$ | 405$-415$ | 400$-410$ |
| Bitumen 60/70 Jey Embossed (Per Ton) | 415$-425$ | 415$-425$ | 410$-420$ | 405$-415$ |
| Bitumen 60/70 Pasargad Embossed (Per Ton) | 415$-425$ | 415$-425$ | 410$-420$ | 405$-415$ |
*To ensure you receive an accurate and current quote based on your specific product needs, we encourage you to submit a detailed request.
Irran Bitumen Price Update: July 2023
| Bitumen Types | 1st Week | 2nd Week | 3rd Week | 4th Week |
| Bitumen 60/70 Drum (Per Ton) | 350$-360$ | 370$-380$ | 375$-385$ | 390$-400$ |
| Bitumen 60/70 Jumbo Bag (Per Ton) | 340$-350$ | 360$-370$ | 365$-375$ | 380$-390$ |
| Bitumen 60/70 Bulk Bitumen (Per Ton) | 260$-270$ | 280$-290$ | 285$-295$ | 300$-310$ |
| Bitumen 80/100 Drum (Per Ton) | 350$-360$ | 370$-380$ | 375$-385$ | 390$-400$ |
| Bitumen 60/70 Jey Embossed (Per Ton) | 365$-375$ | 385$-395$ | 390$-400$ | 405$-415$ |
| Bitumen 60/70 Pasargad Embossed (Per Ton) | 365$-375$ | 385$-395$ | 390$-400$ | 405$-415$ |
*To ensure you receive an accurate and current quote based on your specific product needs, we encourage you to submit a detailed request.
Global Bitumen Latest Prices
Bitumen prices are updated on a quarterly basis
Global Average Bitumen Price for 2023
| Product | First Quarter | Second Quarter | Third Quarter | Fourth Quarter |
| Bitumen Bulk (Per Ton) | 420$-430$ | 430$-440$ | 440$-450$ |
*To ensure you receive an accurate and current quote based on your specific product needs, we encourage you to submit a detailed request.
Bitumen Weekly Newspaper
The Bitumen Weekly Newspaper is the most reliable and comprehensive source of information about the bitumen industry. This weekly newspaper covers everything from market trends to new product developments, making it an invaluable resource for anyone interested in the bitumen industry.
The Third Week of September 2023
Last week, global crude oil prices continued to rise due to predictions by OPEC and the International Energy Agency (IEA) of increased demand and a supply shortage. Both OPEC and the IEA forecasted a crude oil shortage in the market for the fourth quarter, attributing it to extended supply cuts by Saudi Arabia and Russia. Positive economic data from China last week also raised hopes for increased demand from its economy, thereby exerting upward pressure on crude oil, chemical products, and metals.
It appears that, following extensive economic stimuli from the Chinese government, there are signs of stability in China’s economy. These stimuli have resulted in a 3.2% increase in the production of aluminum and steel in the country and a 20% growth in crude oil refining. In contrast, US economic data indicated a rise in the annual inflation rate for the second consecutive month, moving from 3.2% to 3.7%. Notably, over half of this increase was due to the gasoline index.
Next week, the financial outlook in markets will be heavily influenced by the Federal Reserve’s decision regarding interest rates on Thursday. Market predictions suggest that the interest rate will likely remain unchanged at its current level of 5.25% – 5.5%. Furthermore, given the data from last week, it is expected that the preliminary PMI index will show a further decline in US manufacturing for September. Last week, gasoline and diesel prices increased by 7.5% and 5.7%, respectively.
In Iran, on the eve of the president’s trip to the US for the annual UN meeting, there was increased speculation about a potential agreement between Iran and the US. However, these rumors did not lead to a decrease in the dollar or interbank interest rates. In the commodities exchange, a week after changing the base calculation for oil product rates, trading volume was less than supply. In key supplies, the vacuum bitumen of Isfahan Oil Refinery saw a 4% price decrease, while the Bandar Abbas Oil Refinery experienced a 4% price increase. Most of the bitumen trades in the commodities exchange experienced a price increase, with the Isfahan, Pasargad Arak, and Bandar Abbas oil trades recording the highest price growths.
In Iran’s ports, with the end of the monsoon season in India approaching, and considering the steady increase in crude oil prices, export bitumen prices increased, ranging between $320 to $330, compared to $310 to $320 the previous week.
Last week, crude oil prices continued to rise, influenced by OPEC and the International Energy Agency’s forecasts of increasing demand and supply shortages. Both OPEC and the International Energy Agency predicted a shortage of crude oil in the market for the fourth quarter due to the extended supply cuts by Saudi Arabia and Russia. Additionally, positive economic data from China last week boosted hopes of increased demand from the country, exerting upward pressure on crude oil as well as chemical and metal products.
It appears that, following extensive economic stimuli from the Chinese government, signs of stability have emerged in the Chinese economy. These stimuli resulted in a 3.2% increase in aluminum and steel production in the country and a 20% growth in crude oil refining. On the other hand, US economic data indicated an annual inflation rate rise for the second consecutive month, from 3.2% to 3.7%, with more than half of this growth attributed to the increase in the gasoline index.
Next week, financial outlooks in the markets will be heavily influenced by the Federal Reserve’s decision on interest rates on Thursday. Market forecasts suggest that interest rates will remain unchanged at the current level of 5.25% – 5.5%. Considering last week’s data, the preliminary estimate for the PMI index is expected to indicate a further decline in US manufacturing for September. Last week, gasoline and diesel prices increased by 7.5% and 5.7%, respectively, while furnace oil prices for 180 and 380 in the Persian Gulf grew by 2.3% and 0.7%, respectively. The declining trend for furnace oil spread was expected due to the end of the summer season and the anticipated reduced demand in the coming months.
In Iran, as the President prepared to visit the US for the annual United Nations meeting, there was increased speculation about a potential final agreement between Iran and the US. However, this news did not lead to a decline in the dollar or interbank interest rates. In the commodity exchange, one week after the change in the base rate calculation for petroleum products, trading volume was lower than supply. Among the most significant trades, vacuum bitumen from the Isfahan oil refinery decreased by 4%, while Bandar Abbas oil refinery saw a 4% price increase. The majority of the export tar trading in the commodity exchange was accompanied by a price increase. In Iran’s ports, as the end of India’s monsoon season approached and with crude oil prices remaining high, the price of export tar increased, ranging between $320 to $330, up from $310 to $320 the previous week.
SUMMARY OF WORLD BITUMEN NEWS
The global crude oil and furnace oil prices continue to rise, leading to an increase in the asphalt export prices in Europe, the Middle East, and Asia. However, the surge in furnace oil prices influenced the demand and the ratio of furnace oil to domestic cargoes. The European Central Bank’s decision to raise interest rates by 4% is identified as a significant factor affecting asphalt demand. On the other hand, increasing inflation has diminished the value of budgets, subsequently reducing demand in the road construction sector. As September commenced, the monthly price increase of asphalt cargoes in key North-Western European markets suppressed buyer demand. Given the replenished stocks, German suppliers felt compelled to decrease their domestic cargo prices. The activity trend in Africa was unpredictable; heavy rainfall and resulting floods impacted demand in Nigeria. However, with the onset of spring, road construction activities in South Africa intensified. The volume of shipments to South China and the asphalt consumption level in the country remained low, prompting other Southeast Asian countries to seize the purchase opportunities.
HIGHLIGHTS
Brent crude oil prices surged past $92, reaching a nine-month high. This increase can be attributed to the extended production cuts by Saudi Arabia and Russia, coupled with bolstered demand in the United States. The global furnace oil prices followed a similar upward trajectory as crude oil.
In Singapore, asphalt prices strengthened due to rising crude oil costs and growing demand. Meanwhile, the cargo prices in Bahrain remained unchanged. Iranian cargo prices saw an uptick, following the upward trend in vacuum and crude oil prices.
In India, the ongoing monsoon season maintained demand at lower levels, exerting its influence on prices. The country’s domestic refineries decreased their prices, and with the anticipated demand surge next month, refineries are expected to adjust their rates accordingly.
ANALYSTS LOOK AT THE MARKETS
Jeremy Grantham has warned of a historic stock bubble on the verge of bursting, potentially plunging the U.S. economy into a recession. Since the summer of 2020, Grantham has been sounding the alarm. He noted that the rush of stock purchases directed towards the artificial intelligence sector has delayed the bursting of the current technology bubble. Reiterating his warning from earlier this year, Grantham stated that the potential collapse of Silicon Valley banks and other regional lenders in the coming spring might be indicators of a growing “financial strain.” He expressed significant concern about potential financial troubles. Discussing the housing market, Grantham advised that there needs to be controls in place. He pointed out that two decades of declining mortgage rates have resulted in multifold increases in property values in major cities across developed countries. When asked about his estimate of the likelihood of a U.S. economic recession in the next 18 months, he believed it to be over 50% and, to be more precise, around 70%. In contrast, Goldman Sachs foresees only a 15% chance of a recession in the upcoming 12 months, and Federal Reserve economists do not share the same expectations.
According to Jim Egan from Morgan Stanley, due to the delayed effects of rising mortgage rates, the affordability of property transactions will become even worse than it is now. Egan mentioned, “Investing in real estate is still challenging in terms of affordability, and the rise in interest rates in recent months has further worsened the situation.” By their calculations, monthly payments for median-priced houses have increased by 18% compared to the previous year. This rate of acceleration is the most substantial since October 2022. Markets expect the Federal Reserve to keep interest rates elevated to combat inflation by year’s end, which could also affect mortgage rates.
In an interview with Bloomberg, Bill Gross highlighted that a third of the U.S.’s outstanding debt will mature in less than a year. To ensure the Treasury Department can refinance these bonds, a large number of buyers need to be attracted. Gross pointed out that the Federal Reserve’s contractionary campaign intensifies the imbalance between supply and demand as it removes the central bank as a bond buyer. He warned that a lack of demand means treasury prices remain low. “This is risky at times,” he stated. “I’m not saying to exit the bond market. I’m merely saying that yields on this asset class need to rise, or the economy won’t recover. U.S. debts are on the rise, and market experts are raising red flags about a potential recession.”
In a recent speech, Ray Dalio explained that the increasing fiscal deficit is forcing the U.S. Treasury Department to continue issuing bonds. However, the surge in the U.S.’s new debt supply isn’t the only issue. He warned that if investors don’t receive sufficiently high-interest rates, they might sell their bonds. The imbalance in supply and demand isn’t just tied to the volume of new bonds. During a Friday event, Dalio remarked, “The question is, are investors buying bonds with the intent to sell them? I personally believe long-term bonds aren’t a good investment. Although rising interest rates help boost demand for bonds, servicing debt becomes more expensive.”
The Second Week of September 2023
Over the past week, crude oil recorded a growth of about 2%, and oil products also registered an increase ranging from 2 to 5%. This happened during a time when, despite the rise of the dollar index, the prices of most commodities were on a downward trajectory. Global steel and copper prices respectively decreased by 1% and 3%. Although last week saw oil prices rise more significantly than oil products due to price hikes from Saudi Arabia, this trend reversed this week, and the spread of oil products surged. It was anticipated that the oil price would slightly correct upon reaching the technical channel ceiling last week. However, the unsteady supply and demand conditions again placed oil on an upward trajectory. It appears that to reach a balance, higher prices are required, which can be seen in the observed demand decrease, positioning the price at an equilibrium point.
The most significant index released by the US in the past week was the PMI, showing signs of economic improvement a week after an increase in the unemployment rate. Based on recent data, if the US inflation data remains on the rise in the current week, the US economy might tolerate higher interest rates. This scenario increases the likelihood of the dollar index reaching new highs and exerting further pressure on commodity prices in the upcoming weeks. On the other hand, China’s decreased exports and imports in August indicate that a year after the COVID-19 quarantine, the country’s economy is grappling with new challenges, some of which stem from political tensions between China and the West.
In the past week, gasoline and diesel prices rose by 1.8% and 5% respectively. Furnace oil 180 and 380 in the Persian Gulf recorded an increase of 3.7% and 4.4% respectively. In Iran, as the periodic meeting of the Board of Governors approaches, positive news is emerging about Iran’s enrichment report, although no positive economic signs related to this news, particularly a decrease in interbank interest rates or exchange rates, have been observed. In the commodity exchange, some transactions involving vacuum bottom and all export bitumen transactions faced reductions. In the most important export bitumen offers, there was a 7,000-ton transaction of oil with a 3.5% drop, a 10,000-ton transaction of Bandar Abbas Pasargad oil with a 3% weekly price decrease, and a 35,000-ton transaction of Pars Behin Refinery was done at the base price. In Iran’s ports, due to unchanged price conditions, there was not much fluctuation, with the export price ranging from $310 to $320, compared to the previous week’s range of $310 to $315.
SUMMARY OF WORLD BITUMEN NEWS
In the past week, given the continued upward trend of crude oil and furnace oil, domestic and export cargo prices increased in most parts of the world. In Europe, demand surged while supply faced certain restrictions in Asia. In Central and Northern Europe, following the global rise in furnace oil rates, domestic cargo prices naturally rose. Mediterranean bitumen cargo prices also went up under the influence of the global market momentum. However, due to weak demand and ample supply, the premium ratio between bitumen cargoes and maritime transport rates declined. Cargo prices shipped to West African ports and also internal rates to southern destinations of this continent experienced a sharp rise. Yet, in the eastern part of the continent, the prices of bulk and barrel shipments remained relatively stable. In conclusion, concerns about potential supply constraints in October and November became evident among market participants.
HIGHLIGHTS
The unfavorable demand horizon for furnace oil, which became more apparent with the end of the hot season, led to a halt in the upward trend of its global price.
The increase in Singapore’s bitumen price was not very stable last week, and rates experienced a slight decrease. The price trend of Bahrain’s shipments remained unchanged as before.
In Iran, the decrease in demand and the downward trend of vacuum bottom prices led to a reduction in prices.
Refineries in India increased the bitumen price by $14 for September 23rd. Despite this rise, market participants forecast a $10 reduction for the next period.
While concerns about reduced supply continue, the stability of the upward trend of crude oil prices and reaching a six-month peak were slightly adjusted over the past week due to the release of weak economic data from both China and the US. However, with the announcement of extended supply constraints by Russia and Saudi Arabia, some of this correction was compensated for.
ANALYSTS LOOK AT THE MARKETS
Leon Cooperman maintains his expectation of an impending recession in the United States. He emphasizes that he remains among the few calling for an interest rate hike. Even without an aggressive Federal Reserve, Cooperman expects the U.S. economy to undergo a sharp downturn. He identifies several factors that might derail it from its current trajectory, including the Federal Reserve’s monetary contraction campaign, rising oil prices, or the appreciation of the U.S. dollar. Cooperman observed that these factors have “behaved reasonably well,” which explains the strong market performance in recent seasons. For instance, falling oil prices and a weakening dollar were seen as economic positives, boosting investor sentiment.
According to Howard Marks, American companies are set for a tough battle against inflation led by the Federal Reserve. He warns of the potential for a significant number of businesses to default on their debt repayments, as skyrocketing interest rates have made borrowing significantly more expensive. Marks also believes that even if inflation decreases to the Federal Reserve’s 2% target, there won’t be a return to the “easy money” era—referring to the period between 2009 and 2021 when interest rates were close to zero. Marks speculates that, after further inflation declines, the central bank will keep borrowing costs between 2 and 4%. He anticipates the Federal Reserve will adopt a neutral stance, neither stimulatory nor restrictive.
Shingchen Yu, a strategist for emerging markets at CIO Americas UBS, noted, “We believe China has overcome the worst of its recession, but conditions don’t yet indicate a strong recovery.” For this reason, Yu thinks there should be more support for economic policies. Similarly, like the U.S. during the pandemic, China did not flood its economy with stimuli. Yu emphasizes that while the chances of massive stimuli are low, targeted, precise, and strong actions to address current challenges can still change sentiments towards the Chinese economy. Naturally, market turmoil in China draws parallels to the U.S. housing bubble that precipitated the global financial crisis. However, Yu is confident that such comparisons are overstretched.
Tom Lee remains optimistic about the potential growth in the U.S. economy. He points out recent statements from regional Federal Reserve chairs, suggesting that the central bank will persist with interest rate hikes to curb inflation, have caused some investor anxieties. Lee’s focus is on the falling prices of used cars, which account for 15% of consumer inflation. Based on the decreasing prices of second-hand vehicles, he predicts a continuing downward trend. If inflation can continue its decline, the pressure on the Federal Reserve to maintain high-interest rates, which investors view positively, will dissipate. Lee also believes that the growth trend in housing rentals seems to have halted, potentially putting downward pressure on a significant portion of the consumer price index.
The First Week of September 2023
Last week, crude oil experienced a growth of about 6%, and most commodities, with the exception of some oil products like gasoline, diesel, and light oil, saw a price increase. Currently, crude oil seems to play a significant role in guiding the prices of other commodities. Amid efforts by the European Central Bank and the US Federal Reserve to control inflation by raising interest rates, fluctuations in the price of oil can make the path to inflation reduction more challenging. Last week, the US unemployment rate unexpectedly rose to 3.8%, and in Europe, it increased to 5.3%. These figures hint at the early signs of a mild recession. Before these statistics were released, the PMI index of China was published, suggesting early signs of economic recovery in the country.
The crude oil price trends last week were influenced by a mixture of data and news. In the first half of the week, positive economic news from China stabilized oil prices. In the latter half, three main news items triggered an aggressive behavior in oil prices: a decrease of 11 million barrels in US reserves, news of Russia’s agreement with OPEC to further reduce its oil exports in October, and the rise in the US unemployment rate, which could potentially stall the interest rate hikes in September.
Beyond the mentioned data and news, the upcoming week seems crucial for the trajectory of crude oil prices. Crude oil is facing a significant resistance level, and the decision of OPEC+ regarding production cuts will be a determinant in breaking this resistance. Last week, the Platts magazine was not published on Friday, but Thursday’s prices indicated a 3% decrease in gasoline, a 2% decrease in diesel, and a decline of about 1% in both 180 and 380 furnace oils from the Persian Gulf. Recent data from Iran showed a daily export of 2.2 million barrels in August, but no further news on any agreements was released. This week, there was no change in the yield rate of treasury bills compared to last month, keeping a consistent trend. In the commodities market, there were noticeable declines in major oil refinery sales.
In Iran’s ports, due to the off-season rainy demand and the decrease in furnace oil prices, there was an approximately 3% decrease in export bitumen prices, positioning the export price between $310 to $315, down from the previous week’s range of $317 to $325.
SUMMARY OF WORLD BITUMEN NEWS
Over the past week, bitumen prices have risen in most global export points, driven by an uptick in crude oil and furnace oil prices. Internal rates in northern and central Europe remained relatively stable, trending upward, with market participants expecting prices in the key northwestern European markets to rise with the onset of the new week. Additionally, prices for shipments imported to Western and Southern African terminals saw growth, but the extent of activity and demand levels were not entirely clear. In Singapore, shipment prices grew due to signs of rising demand, and market players believe that the country’s domestic demand will increase in September.
HIGHLIGHTS
• Bitumen prices in Singapore continued their upward trend. However, given the lack of significant demand observed in the country, this upward movement is not very strong.
• The price for bitumen shipments from Bahrain remained at $410.
• Prices for bitumen shipments from Iran decreased slightly due to weak demand. However, the transaction volume at these lower prices was minimal, and most market participants showed no inclination to offer their shipments at these reduced prices.
• Prices in India for September are expected to increase by $12 per ton.
• With the release of data on changes in US stored oil and the announcement of the PCE inflation within expected frames, alongside the prospects of a halt in US interest rate growth in September, crude oil prices experienced an upward trend. Furthermore, after consecutive growth for two weeks, furnace oil prices remained relatively stable during the week but resumed their upward trajectory by the week’s end due to the rise in crude oil prices.
ANALYSTS LOOK AT THE MARKETS
According to economist David Rosenberg, the U.S. economy is heading towards a recession in early 2024. He commented, “We’ve possibly witnessed the most significant interest rate shock since 1981. Notably, in the subsequent year of 1982, the economy didn’t experience any mild recession. The impacts of interest rate hikes have been offset somewhat by the long-term effects of fiscal stimuli, which are now coming into play.” Rosenberg added, “It would be miraculous if we escape this looming mild recession.” He further warned of the potential for another increase in rates. Addressing the outlook of the impending recession, he said, “I’m giving it about six months.” Additionally, he drew parallels between the recent rise in credit card delinquencies and the 2008 housing loan crisis. Rosenberg noted that banks are loosening their lending standards, which affects borrowers and overall credit quality. He elaborated, “Economic recessions start like this: with a notable erosion in credit quality in a particular asset class. Right now, you’re seeing it with credit cards, even if these loans don’t resemble the scale of residential mortgages, as was the case in 2008.”
The Wall Street Journal reported that Saudi Arabia is considering an Initial Public Offering (IPO) for its oil company, Aramco, which could set a new record for IPOs. In a potential deal, Aramco shares could be listed with a value of $50 billion, making it the largest IPO in capital market history. Aramco is reportedly reaching out to potential investors, including other global oil companies and independent investment funds. Nevertheless, selling shares in this state-owned company remains a top priority for Saudi Arabia. Crown Prince Mohammed bin Salman intends to use the proceeds to help the country diversify away from oil.
Matt Smith, a senior oil analyst at Kepler, informed Insider, “Both China and India are capitalizing on discounted Russian crude oil, benefiting from the sanctions placed on Russian commodities by other nations.” After China and India, Turkey and Bulgaria are the major buyers of Russian crude. According to Kepler reports, India, being the third-largest oil importer globally, used to rely on Russia for about 1% of its total oil volume before the war. Now, that number has surged to 51%. The pattern indicates a shift in Russia’s crude oil exports, redirecting towards Asian buyers and moving away from Europe.
The CEO of Yahoo Finance said in an interview: “With rising interest rates, the stock market might see a drop of 10% or even more, wiping out a significant portion of the 17% profit of the S&P in the current year.” Eddie Ghabour pointed out, “The looming credit card debt and potential resurgence of student loan repayments starting in October could impact the American consumer. These events could harm the U.S. economic outlook but might also bring the Federal Reserve closer to its goal of returning inflation to 2%.” He added, “The only remaining solution is to reduce demand. I don’t see how you can reduce rates next year without triggering a recession.”
The Fourth Week of August 2023
Last week, crude oil prices saw little fluctuation compared to the beginning of the week. However, other commodities, such as metals and petrochemical products, experienced a weekly increase. Market focus was primarily on the Federal Reserve’s meeting in Jackson Hole. Although there is still time until the next Federal Reserve meeting on September 20th for interest rate decisions, the discussions suggested a consensus among analysts that interest rates would not increase in the upcoming session. Given this backdrop, it seems China’s economic decisions will play a significant role in the oil market in the next two weeks.
Signs of China’s new approach became evident as the country decreased its short-term interest rates and facilitated housing loans for consumers. Furthermore, amidst weeks of supply constraints in the oil market, economic discussions included agreements between the U.S., Iran, and Venezuela regarding increased exports. Such agreements with these countries might neutralize OPEC+ strategies aimed at pushing oil prices upward. Technical analysis of oil prices suggests positive news on oil supply as prices approach the significant threshold of $90. Recent data indicates a resurgence in U.S. oil production, potentially leading to an increase in market supply. Last week, gasoline and diesel prices increased by 5% and 1.5%, respectively, while the price of furnace oil in the Persian Gulf dropped by around 3% and 5%.
In Iran, while no new political news emerged last week, the continued increase in oil exports signifies the ongoing stabilization of the Iran-U.S. agreement. Despite this positive news, the average yield on debt securities in Iran remains above 25%, and the dollar’s free market exchange rate hovers between 48,000 and 49,000 Tomans. The government’s recent bond auction with rates higher than 25% for two-year securities was unsuccessful, as the market demands even higher rates. In the commodity exchange, both vacuum bottom and export bitumen saw a weekly decline. Notably, a 60,000-ton transaction from the Esfahan oil refinery decreased by 2%, and a 30,000-ton transaction from the Shazand oil refinery declined by 3.8%. Most export bitumen transactions, like those from the Pasargad Bandar Abbas and Pasargad Abadan refineries, had demand lower than the supply.
Due to a drop in furnace oil prices and a continued decline in the commodity exchange transactions, the export bitumen price in Iranian ports fell by approximately 2%. The export price ranged between $317 to $325, down from the previous week’s $320 to $335 range.
SUMMARY OF WORLD BITUMEN NEWS
Last week, tar prices remained relatively stable, with both crude oil and furnace oil prices seeing little to no change. The ratio of tar to Mediterranean furnace oil prices remained consistent. However, arbitrage opportunities to Northwest Europe decreased, while domestic shipment rates remained unchanged in most parts of Northwest and Central Europe. Given market participants’ expectations of price increases in September, some buyers made their purchases in the European market. Western African terminals also witnessed a fairly high volume of shipments last week. Furthermore, Singapore shipment prices experienced growth during the past week.
HIGHLIGHTS
• Bitumen prices in Singapore received slight support but showed no clear trend.
• After two periods of increase, Bahrain kept its price unchanged last week.
• In Iran, in line with the regional tar trend and the continuation of the seasonal rains in India, demand was weak, and prices faced slight downward pressure.
• Refineries in India remain uncertain about changing their prices, considering the global rise in crude oil and tar prices, and on the other hand, limited domestic demand. Experts believe that in the coming month, these refineries will increase their prices.
• With the release of new economic data from China and the growth in supply due to the resumption of exports from Iraqi Kurdistan, crude oil prices were affected and decreased. Furnace oil prices experienced no significant changes this week.
ANALYSTS LOOK AT THE MARKETS
Yuri Seliger, a strategist at Bank of America, noted on Friday that “$1 trillion of new leveraged credit has been accounted for over the past five years.” He added, “Approximately half of this money is currently in well-performing capital structures, while the other half is now in riskier stages. About 25% of it is tied to companies issuing high-risk bonds, 35% in syndicated loans, and the remaining 40% in private debt.” Several experts have warned about the rising levels of private and government debts in the U.S., especially when markets transition out of the ultra-low-interest-rate era.
Austen Goolsbee, President of the Federal Reserve Bank of Chicago, reinforced his strong stance, aligning his views with those skeptical of aggressive tightening measures. Goolsbee emphasized the unfinished work of the Federal Reserve, reminding us that “inflation is still higher than what we want.” With cautious optimism, he elaborated on the rare scenario where the Federal Reserve can overcome inflation without triggering a recession, describing it as a potential “major victory” without historical precedent. Goolsbee’s pessimistic outlook emerged when he alluded to maintaining the nominal interest rate at 5.5%, along with decreasing inflation, implicitly endorsing further tightening of contractionary policy.
Jerome Powell, Chairman of the Federal Reserve, shared his economic outlook in Jackson Hole on Friday. Powell didn’t provide explicit hints about the bank’s next move but pledged to achieve a 2% inflation rate. He noted the Federal Reserve would proceed “carefully” when deciding on interest rate hikes. The only certainty from Powell’s comments was the commitment to a 2% inflation goal, and the central bank would continue its efforts to achieve it. He didn’t commit to whether the Fed would raise rates, but it was evident that they wouldn’t stray from the 2% inflation target and interest rates would not be cut anytime soon.
According to Dobrajvko Lakos, a strategist at JP Morgan, a vast array of factors will influence markets by the end of 2023, and monetary policy is likely to remain tight. Lakos believes the Federal Reserve will likely keep interest rates high for the remainder of the year and probably won’t initiate interest rate cuts anytime soon, foreseeing a stricter fiscal policy. He pointed out that 2023 has been a “massive year of fiscal stimulus” with the government spending $1.8 trillion. However, federal expenditures are expected to decrease significantly in 2024, which could impact economic growth. While some analysts claim the U.S. can avoid a recession this year, any current economic resilience is primarily due to robust fiscal spending and consumer expenditure, both of which are expected to decline by 2024. Lakos also noted that savings are rapidly decreasing, which erodes the buffers protecting the economy from challenging financial conditions.
The Third Week of August 2023
Crude oil prices fell by around 2% last week. The market, after weeks of growth due to supply and demand imbalances, is now focusing more on fundamental factors. Concerns among Federal Reserve committee members about the necessity of a further interest rate hike dominated last week’s meeting. As a result, most markets trended downwards, while the dollar index reached just above 103. The prediction of continuing interest rate hikes was also supported by the rising U.S. retail index. On another front, new credit risks in China’s economy indicate that the country’s debt crisis shows no signs of abating and is even spreading to its banking sector. Released data further indicates intensifying competition between the world’s two largest economies, with China reducing its holdings of U.S. debt by $103 billion last month. This move emphasizes China’s potential to impact the U.S. economy by limiting its financial options.
For the week, data showed a decline in active U.S. oil rigs and a decrease in U.S. oil reserves by about 6 million barrels. U.S. crude oil exports stood at 15.7 million barrels per day, and imports at 12.3 million barrels per day, indicating a drop in export volume compared to previous months. The challenges for oil traders in the coming months seem to be the potential decline in U.S. oil production, China’s high oil reserves exceeding 1 billion barrels, and the possibility of a recession in either of the two major economies.
Gasoline and diesel prices fell by 3.5% and 1.8% respectively last week. Additionally, Gulf furnace oils 180 and 380 both saw a price decrease of approximately 0.9%. In Iran, the recent positive diplomatic engagements between the U.S. and Iran did not generate positive economic expectations domestically. The exchange rate for the U.S. dollar reached above 48,000 Iranian Rials, and the average risk-free rate increased from 23% to 26%. The Central Bank’s third debt securities auction, with rates above 25% for two-year bonds, was unsuccessful, suggesting that the bank’s strategy to control money supply growth by maintaining high-interest rates isn’t working.
In the commodity exchange, the vacuum batum’s price was stronger than the export bitumen. Transactions for Isfahan’s oil refinery grew by 2.3%, while Bandar Abbas’s oil refinery experienced a weekly decrease of 1.6%. Almost all export bitumen transactions in the commodity exchange saw a weekly decrease. Due to the ongoing monsoon in India, consistent commodity exchange transactions, and the declining crude oil prices, export bitumen prices in Iranian ports dropped by 1-2%. The export prices ranged between $320 to $335, down from $325 to $340 the previous week.
SUMMARY OF WORLD BITUMEN NEWS
Last week, the price of asphalt shipments in Singapore experienced an increase. In contrast, prices in European export regions followed a different trend and declined. Additionally, domestic prices in Europe remained low due to the subdued demand. Mediterranean shipments of asphalt significantly reduced, with only a small volume being dispatched to North African terminals. The rates for European export shipments also faced pressure due to the decline in crude oil and furnace oil values. Construction activity and asphalt demand in Eastern Africa showed an upward trend. However, regions in Western Africa continued to have weak demand, attributed to persistent rainy weather.
HIGHLIGHTS
• The price of asphalt in Singapore has seen a slight increase, but the demand for the product remains unchanged.
• Last week, Bahrain raised its bulk asphalt price by $30.
• Refineries in India increased their prices by approximately $24.
• In Iran, there was an expectation for asphalt prices to rise due to positive political news related to the reduction of sanctions. However, this trend halted due to anticipated strengthening of the Rial, a drop in crude oil prices, and a decline in vacuum rates. Traders believe that ongoing monsoon rains in India until the end of September will impact the weak demand for Iranian asphalt.
• Crude oil prices this week were influenced by China’s weak economy and fears of further interest rate hikes in the U.S., declining by about 3% after weeks of increase. The deepening crisis in China’s property sector has added to concerns about the country’s shaky economy. Nonetheless, furnace oil and diesel prices remain at high levels, contributing to the strengthening of asphalt prices.
ANALYSTS LOOK AT THE MARKETS
The Securities and Exchange Commission revealed on Tuesday that Burry’s Scion Asset Management has made a significant bet against the U.S. economy by issuing a bearish put option on 200,000 shares at the end of June. The head of this company has been sounding the alarm on stocks and other high-risk assets for a while now. He also purchased a substantial number of energy and transportation stocks in the second quarter. Michael Burry is renowned in the U.S. stock market for predicting major bubbles. Burry’s decision to take a short position on many market stocks while buying energy and shipping shares might indicate his optimism about international trade and global recovery. However, many traders have expressed concerns about Burry’s perspective given the economic challenges worldwide.
The Second Week of August 2023
Last week, crude oil prices experienced a smaller growth compared to the previous weeks due to weaker than expected data released from both China and the United States. The U.S. dollar index rose, and the producer inflation increased by about 0.3% in July. Estimates suggest that this will put more pressure on the Federal Reserve to control inflation. Moreover, China’s trade balance showed a decrease in both imports and exports, dimming hopes for an increased crude oil consumption by the country. Despite these economic data points, the market continues to experience pressure due to reduced supply.
According to a recent report from the International Energy Agency, a decrease in production by OPEC has led to a global crude oil production decline to 100.9 million barrels per day, while global demand has reached a record 103 million barrels per day. This report supports the price increase of oil. Additionally, data indicating that the combined reserves of Western countries have reached around 115 million barrels demonstrates the supply-side’s strength in controlling oil prices.
With the increasing friction between oil supply and demand, tensions between Russia and Ukraine are also on the rise, which could introduce new risks to the market and temper optimism about the success of the Jeddah conference. Key market influencers for the upcoming week will include the FOMC meeting and China’s retail sales data. In the past week, gasoline and diesel prices rose by 6% and 1%, respectively, while prices for furnace oil 180 and 380 in the Persian Gulf decreased.
In Iran, news of a preliminary agreement between Iran and the United States was released by the end of the week. However, the currency market’s reaction was limited, with the dollar exchange rate remaining stable around 47,100 Tomans. It’s anticipated that a decrease in prices might push the dollar’s market rate down to 44,500 Tomans.
On the commodity exchange, the trend in vacuum bottom supply was stronger than that of export bitumen, as both supply and demand for vacuum bottom increased. Though the supply from Esfahan’s oil refinery experienced about a 4% decline, other commodities either remained neutral or witnessed an upward trajectory. However, in the case of export bitumen, supply decreased, and demand was lower than the supply, resulting in most commodities ending the week with a decline.
Conversely, ports in Iran had a different trend. Despite continued rains in India and South Africa and weak demand from China, there was no downward pressure on Iran’s export bitumen prices. Due to the potential reduction in sanctions, stable regional pricing, and the high price of crude oil, Iran’s bitumen prices rose by approximately 5%. The export price at Iranian ports ranged between $325 to $340, up from $310 to $320 the previous week.
SUMMARY OF WORLD BITUMEN NEWS
Over the past week, with the sustained upward trend in crude oil and furnace oil prices, the cost of bitumen shipments rose globally. However, demand was weak in many markets. In European markets, construction activities saw a slight decline approaching the summer holidays. This was juxtaposed with a growing gap between Rotterdam FOB furnace oil prices and Mediterranean FOB bitumen shipments, which subsequently elevated the demand for Mediterranean bitumen.
While markets in North Africa, like Morocco, witnessed heightened activities, the import prices surged for Western and Eastern African markets. In contrast, prices were more fluctuating in the Southern African markets. In Asia, the Singaporean market experienced numerous fundamental changes last week, with some being contradictory. On one hand, the internal furnace oil price hikes led to rapid price increases. On the other, unfavorable weather conditions and ongoing seasonal rains in several countries reduced the demand for bitumen. The occurring storms also affected China’s demand, and coupled with weak economic indicators and the government’s budget constraints for projects, this resulted in delays in some project executions.
HIGHLIGHTS
- After the recent bolstering of crude oil prices over several weeks, attributed to reduced supplies from Saudi Arabia and Russia, concerns about demand in China pressured oil prices at the week’s start. However, they subsequently rebounded to their upward trajectory. In another development, furnace oil and diesel prices rose, influenced by the heatwaves in Europe and the Middle East, leading to a surge in energy demand.
- The demand for bitumen shipments in both Singapore and China has remained low.
- Given the rise in furnace oil prices, Bahrain is projected to increase its rates by $30 per ton.
- A surge in vacuum prices and intensified competition in the commodity market has contributed to an uptick in bitumen prices in Iran. Considering the escalating crude oil prices and the potential rise in Bahraini bitumen costs, it’s anticipated that Iranian bitumen prices will also gain support.
- At the outset of August, refineries in India raised their prices by $24. This upward trend in prices is expected to continue.
ANALYSTS LOOK AT THE MARKETS
Krugman: Fitch has downgraded its credit rating for U.S. debt, leading to market fears and a subsequent downturn. However, the current economy is stronger than to immediately plunge into a credit crisis. Whether the United States will face a credit crisis within the next decade or two remains uncertain and seems to have a low likelihood. The key reason for this is that the ratio of interest rates to government debt is lower than economic growth. Despite the rapid increase in interest rates by the Federal Reserve in the past year to curb inflation, this ratio stands at around 1.83%. Meanwhile, the U.S. Gross Domestic Product (GDP) has grown by more than 2% in the last two quarters.
The First Week of August 2023
Over the past week, crude oil prices have risen by about 2%, marking a 13% increase in the past month. Published data on oil supply and demand indicates the influence of key producers’ decisions to reduce supply in the market. Reflecting on previous statements by Saudi officials last year, they aimed for oil prices between $90 and $100 per barrel. Considering the peace talks in Jeddah over Ukraine involving the U.S., a decline in active U.S. oil wells, production cuts from Saudi Arabia and Russia, and an increased demand from China to stockpile crude oil, there might be indications of a common goal or agreement. Alongside this, Saudi Arabia’s emphasis on reducing its oil production cannot be ignored. This could potentially shift the declining trend in oil prices that started in 2008, temporarily raising the Brent crude price to $110.
This week, the U.S. unemployment rate was published. Although it didn’t indicate an economic recession, the non-agricultural employment index revealed that job creation in the country was below expectations, only accommodating new entrants into the job market. Economic data released from China last week showed a manufacturing PMI below 50, highlighting the ongoing contraction in its economy. During the same period, gasoline prices fell by 3%, while diesel prices rose by 6%. Prices for furnace oil 180 and 380 in the Persian Gulf also saw an approximate 10% increase.
Data from S&P showed that in July, Iran exported an average of about 197,000 barrels of petroleum products to the Port of Fujairah. These exports, combined with those from Russia and Iraq, were eventually shipped to Singapore, Malaysia, South Korea, and Saudi Arabia. Meanwhile, in Iran, despite the Central Bank’s emphasis on official rates, the dollar price in the free market rebounded temporarily above 50,000 tomans. On the commodity exchange, the trend for vacuum bitumen was mainly downward, while the export pitch trend was upwards. The export pitch prices on the commodity exchange experienced a weekly rate increase of 4 to 10%, despite a significant increase in supply. In contrast, besides the 50,000-ton supply from Isfahan Oil Refinery and the 15,000-ton supply from Tehran Oil Refinery, the remaining vacuum bitumen offers saw a weekly decrease.
Additionally, the ongoing seasonal rains in Iran’s export markets led to a roughly 3% increase in pitch prices. The export price at Iranian ports ranged between $310 and $320, up from $305 to $310 the previous week.
SUMMARY OF WORLD BITUMEN NEWS
Despite a significant drop in demand due to summer holidays, the price of asphalt shipments in northern and central European markets and the Mediterranean regions such as Italy, Spain, Greece, and Singapore increased. Moreover, in the Asia-Pacific and Middle East regions, despite weak foundational demand in several key markets, such as India, shipment rates experienced growth. In Africa, the overall rate of shipments was influenced by the increasing prices of bulk and barrel shipments from European and Middle Eastern export points. Demand in Southeast Asia did not show signs of returning to previous levels. The price of Iranian asphalt also continued its upward trend, considering the rising production and storage costs by some traders.
HIGHLIGHTS
• The demand for asphalt in Singapore remained relatively weak this week. However, prices strengthened due to the increase in global rates.
• The price of Iranian asphalt, even though under pressure with the continuation of the end-season rain, experienced growth due to the significant rise in the furnace oil rate and competition in the commodity exchange for vacuum bitumen transactions.
• Bahrain kept its prices unchanged at $410.
• In line with global prices, Indian refineries increased their rates by $23 per ton. Although the continued rainfall affected the demand, the rising crude oil and furnace oil prices, as well as the support of Asian refineries for higher rates, were influential factors for the upward trend of asphalt.
• Following the limitations in crude oil supply and increasing demand in countries like the USA and India, crude oil prices went up. Similarly, the price of furnace oil also continued its upward trend in line with crude oil.
ANALYSTS LOOK AT THE MARKETS
Tom Lee, who has been one of the most bullish voices on Wall Street stocks, issued a warning to investors on Thursday. He stated that he still sees the stock market trending upward in the first half of the year, but he is currently observing signs in the market that suggest a downward trend in the coming weeks. Lee mentioned that the markets have followed the pattern of July, but they started August a bit differently overall. He added that the jobs report released on Friday could turn out better than expected in the future. If this happens, investors will become skeptical about the Federal Reserve continuing to raise interest rates. The market currently does not anticipate an interest rate hike, but if there is a change in this approach, investors might alter their current strategies.
The Fourth Week Of July 2023
In the past week, crude oil prices rose more than 5%, coinciding with a noticeable increase in most petroleum products. It appears that in the global oil market, the simultaneous increase in demand during the summer season, coupled with the reduced supply by OPEC, has led to a strong upward trend in crude oil prices. Following the Federal Reserve’s 0.25% interest rate increase last Thursday, there’s now a general consensus among traders that the rise in interest rates will slow down or stop in the US. It seems this development will result in the market paying less attention to interest rate trends and more to short-term supply and demand events in the coming weeks.
Moreover, last week’s economic news from the United States was diverse and led to significant fluctuations in the dollar’s value. On the positive side, the PCE inflation was weaker than expected, and personal spending in the United States increased. Conversely, the average income per American saw less growth than expected.
Furthermore, in China, the 24-member Politburo of the Communist Party, the senior decision-making body, promised “anti-cyclical” policies, which is a positive sign for the market. This week, the Kepler Institute reported that China’s crude oil reserves are approaching one billion barrels, while US crude oil production has reached its lowest point in the last two years. This news could transform China from merely a consumer to also a supplier.
In the past week, the prices of gasoline and diesel increased by 2% and 7% respectively, while the prices of furnace oil 180 and 380 in the Persian Gulf grew by 5.3% and 4.5%. In Iran, despite the Central Bank maintaining its policy rates unchanged, the free market dollar price stopped at its support line, failing to maintain a price level of 47,000 Tomans.
In the commodity exchange last week, prices were on an upward trend due to the rising trend of crude oil and furnace oil prices. Export bitumen transactions were relatively positive in the commodity exchange, while the competition and supply in vacuum bottom transactions remained high, causing all transactions, except for a 50,000-ton supply from Esfahan Oil Refinery, to increase by more than 5%.
Last week, the pressure of demand shortage on bulk bitumen FOB Bandar Abbas, Iran, decreased, and the export price of this country in the ports ranged from 305 to 310 dollars, compared to the previous range of 280 to 295 dollars.
SUMMARY OF WORLD BITUMEN NEWS
Last week in Africa, due to budget constraints on road construction projects and unfavorable weather conditions, the demand for bitumen remained low. In Singapore, prices were affected by the global rise in crude oil prices, increasing after weeks of decline. In the northern and central parts of Europe, with the arrival of summer holidays and a decrease in road construction activities, bitumen prices and transportation rates remained unchanged. Mediterranean shipments were also strengthened as a result of rising furnace oil prices. Furthermore, in Iran, the price of vacuum bottom, a petroleum product, continued its upward trend, leading to an increase in export bitumen prices.
HIGHLIGHTS
• Last week, the price of furnace oil also experienced a growing trend in line with the rise in crude oil prices.
• Despite no change in demand in Singapore, the price of bitumen in the country remained unchanged. Market participants believe that prices will be supported in the near future.
• Rates in Bahrain remained unchanged from last week at $410.
• As a result of the rise in vacuum bottom prices and high competition in the commodity market, the price of Iran’s export bitumen also increased, which shocked Indian buyers. Traders believe that domestic suppliers are stockpiling ahead of a surge in demand in India.
• Rainfall and floods continued to affect the level of demand and sales of bitumen in India. It is predicted that due to the increase in crude oil prices and petroleum products in the past month, Indian refineries will increase their prices by about $20.
ANALYSTS LOOK AT THE MARKETS
Mark Mobius, founder of the emerging markets investment fund, confirmed that he holds no investments in the United States, expressing optimism about emerging markets in Asia. Mobius stated that he has focused his investments in Taiwan, South Korea, and India. Although some observers have expressed concern about a possible conflict between China and Taiwan, Mobius believes it’s unlikely that tensions will escalate significantly anytime soon. He suggested that any potential attack on Taiwan would likely face resistance from the United States, given China’s economic dependence on US markets.
Mobius also showed a more favorable attitude towards India, given its larger population of 1.4 billion, compared to China, and its Gross Domestic Product growing at a rate of 7 percent annually. He believes these factors could help the country become a significant supply base in the future.
The Third Week of July 2023
Last week began with positive economic data from China, but the figures indicated slower-than-expected economic growth. This unexpectedly dampened the outlook for oil consumption by the world’s largest crude oil importer. The dollar index returned above 100, bolstering commodity prices. Brent oil saw an approximately 1.6% growth, while gasoline and diesel prices increased around 4%.
Data published during the week highlighted the ongoing global crude oil supply decline. On the other hand, China’s oil reserves increased. Additionally, tensions escalated again in the Russia-Ukraine conflict after several months of a downturn, elevating the risk of sudden events that could upend all equations.
Markets are eagerly awaiting the Federal Reserve’s interest rate decision on Thursday, July 26. Despite persistently low inflation in the United States, many traders anticipate a 0.25% interest rate hike, a development that could profoundly impact markets and potentially lead to falling oil and other commodity prices. Published data indicates that US oil reserves are 1.1% higher than the 5-year average, without any significant fluctuations.
Over the past week, Persian Gulf furnace oil prices for 180 and 380 grades increased around 1%, and the spread of these products stopped at -14 and -11 dollars, respectively. In Iran, even without any indications from the central bank for interest rate cuts, positive news from the nuclear agreements and the Omani foreign minister’s visit to Iran caused a decline in the dollar. By the end of the week, the exchange rate stayed below 49,000 Rials.
In the commodities exchange last week, prices continued to rise due to the strengthening of the Rial and the increase in crude oil prices. Export bitumen transactions in the commodity exchange recorded a weekly growth of more than 2% to 7%. On the other hand, the competition in vacuum bottom transactions was strong, resulting in price increases of more than 3%, except for the 40,000-ton supply from the Bandar Abbas oil refinery.
Furthermore, the continuation of the monsoon season in India, Iran’s primary export bitumen market, caused the FOB price of bulk bitumen in Bandar Abbas, Iran, to trade in the range of $280 to $295 (last week it was $285 to $295).
SUMMARY OF WORLD BITUMEN NEWS
The price of Singapore bitumen continued to decrease this week due to supply at lower prices. Additionally, demand in Europe remained low, and the price of European export and domestic shipments saw a slight change. Construction activities and the demand for bitumen have nearly ceased before the European summer holidays, and European domestic shipping rates have not significantly changed either.
Construction activities and demand for bitumen in the Africa region also remained at lower levels, even though activities in South Africa were higher than the same period in previous years. The price of Iranian bitumen continued its upward trend, experiencing an approximate increase of 30 dollars so far.
HIGHLIGHTS
• The lack of sufficient demand continues to put pressure on the prices of bitumen in Singapore and China, keeping prices at low levels in these countries.
• Bahrain is expected to increase its price by 20 dollars, reaching 410 dollars.
• In Iran, despite weak demand, the price of bitumen and vacuum bottom has strengthened. It is expected that with price increases from Bahrain and the continuation of the upward trend of fuel oil and diesel, prices will continue to rise.
• Indian refineries have not made any changes in their prices, and only the price of VG10 bitumen has decreased by 18 dollars per ton. It is predicted that refineries in this country will increase their prices at the beginning of August in line with global rate growth.
• As a result of the increase in the price of crude oil, the price of fuel oil was not an exception to this rule and experienced a price increase.
ANALYSTS LOOK AT THE MARKETS
Robert Shiller, a Yale University economics professor, suggested that the more than a decade-long rise in home prices might soon come to an end following the conclusion of the Federal Reserve’s contractionary cycle. He commented, “In my opinion, the fear of increasing interest rates has affected people’s thinking. It’s not just homeowners, but new buyers who wanted to lock in their home deals with loans before interest rates rise. Thus, their demand has positively impacted the market, but it’s ending.”
A downturn in housing prices could potentially prevent the Federal Reserve from raising interest rates in the coming months, thereby controlling inflation. Shiller added that this new trend contradicts the traditional reputation of the housing market, which is more predictable, particularly after over a decade of steady housing price increases that investors thought would continue.
Shiller stated, “But it may end with the conclusion of this interest rate hike cycle.” His perspective differs from others on Wall Street who believe the end of the Federal Reserve’s interest rate increases will cause housing prices to rise. They argue that according to Wall Street activities, readjusting borrowing costs will return higher demand to the market.
The Second Week of July 2023
Over the past week, the US dollar index fell to its lowest point in the past year (99.6), leading to a surge in the prices of crude oil and oil products. Brent oil saw an increase of around 1.4%, while gasoline and diesel prices rose by 6% and 5% respectively.
Last week’s occurrences complemented oil price fluctuations, such as the halt of oil exports from Nigeria, the closure of Libya’s second-largest oil field, and signs of decreased supply from Russia. The inflation rate in the US was significantly lower than expected this week, increasing the likelihood of inflation reaching the Federal Reserve’s target rate. The closer inflation gets to the Federal Reserve’s target rate, the more traders expect a halt in the rising interest rates in the US, reducing the risks associated with a potential economic recession.
However, China’s economic growth figures are due to be released on Tuesday. This follows last week’s report on China’s trade balance, which revealed a decline of approximately 12% in exports in June. If predictions of an economic growth of over 7% in China in the second quarter, compared to 4.5% in the first quarter, are fulfilled, it could serve as a lever for the increase in crude oil prices at the start of this week.
Furthermore, the US gasoline inventory has fallen by 7%, lower than the 5-year seasonal average. This happened as US crude oil production retreated to 12.3 million barrels per day, indicating that as the weather heats up and the travel season starts in the northern hemisphere, the US is losing control over the market.
Last week, the prices of 180 and 380 fuel oil in the Persian Gulf rose approximately 5%, while gasoline rose more than 6%. In Iran, the US dollar, continuing its behavior from the previous week, fluctuated slightly, trading in the range of 49,000 to 50,000 Toman. Meanwhile, transactions in the exchange market remained relatively stable.
In the commodity market, it appears that the allure of the oil product market has returned over the past week. Export tar transactions in the commodity market registered a weekly growth of over 5%. On the other hand, intense competition in vacuum bottom transactions led to the final price of the 50,000-ton offerings from Isfahan and Bandar Abbas oil refineries increasing by 14% and 8% respectively on a weekly basis.
The increasing trend of prices in the Iran Commodity Exchange also led to the FOB price of bulk tar in Bandar Abbas, Iran, being traded in the range of $285 to $295 (last week it was $273 to $283).
SUMMARY OF WORLD BITUMEN NEWS
Last week, the prices of crude oil and furnace oil increased, leading to a rise in bitumen prices in European export ports. However, in Singapore, prices came under pressure due to weak demand from China. Traders believe that the price increase in the Mediterranean has reduced arbitrage opportunities from southern to northern Europe. The rates for shipments sent to West Africa have followed an upward trend due to the rise in Mediterranean furnace oil. Moreover, shipments sent to the east of the continent also experienced growth due to strengthening Iranian prices.
HIGHLIGHTS
• Crude oil prices strengthened after the release of statistics showing a decrease in U.S. inflation and lessening recession risk, one week after supply cuts from Saudi Arabia and Russia. Furnace oil prices also increased due to positive market sentiment and growing demand.
• In India, bitumen prices weakened amidst heavy rainfalls and floods, which led to a decrease in construction activities and subsequently, a drop in demand.
• Despite high inventory levels, it is expected that Indian refineries will keep their prices unchanged. This is likely to result in an increase in furnace oil and light diesel prices.
• In Singapore, bitumen prices continued their downward trend due to ongoing weak demand and availability.
• Bahrain kept its bitumen price unchanged at $390.
• Iranian bitumen prices increased due to a rise in vacuum prices and the strengthening of the Rial. Market participants are expecting more price competition in the coming week.
ANALYSTS LOOK AT THE MARKETS
On Friday, Jamie Dimon, CEO of JPMorgan, issued a warning about economic conditions, citing a list of key concerns for his bank. This billionaire banker, in his interpretation of the flexibility of the U.S. economy, praised the banks’ balance sheet conditions, consumer expenditures, and employment growth, but emphasized the existence of “prominent and sudden risks”.
He added that the ongoing war in Ukraine, in addition to causing a massive humanitarian crisis for Ukrainians, has potential substantial impacts on geopolitics and the global economy. He pointed out that a “significant and somewhat unprecedented countercurrent is taking shape”.
The bank’s head reiterated his emphasis on the Ukraine dispute, the potential disruption in global energy supply, and the unknown consequences of countries reducing their money supply. He added that if any of these risks threaten the U.S. economy, it is unclear whether they will result in a “soft landing, mild recession, or hard recession” for the U.S. economy.
The First Week of July 2023
Last week’s unexpected economic data from the US and a joint commitment by Russia and Saudi Arabia to continue reducing crude oil supplies resulted in significant price fluctuations. US economic data revealed the addition of 209,000 jobs last month, which was less than the forecasted 225,000, indicating signs of weakness in the country’s business environment. However, traders are predicting a 0.25% increase in the Federal Reserve interest rate at the June 26th meeting with nearly a 95% certainty. However, the release of US inflation data this week, on July 12th, will provide a clearer trajectory of this country’s interest rate growth.
Crude oil prices rose approximately 4% this week, attributable to four factors: Saudi Arabia’s announcement of a continued reduction in production of one million barrels of crude oil until the end of August; Russia’s announcement of a daily cutback of 500,000 barrels of crude oil; Kazakhstan’s reduced crude oil production due to power outages; and the weekly Baker Hughes report, showing that the active American oil rigs have hit their lowest levels in the past 15 months.
While the US stands at peak production with 12.4 million barrels of oil, Citigroup predicts that this country will ramp up its output to 13 million barrels per day to compensate for the shortage. Last week, the price of furnace oil 180 and 380 in the Persian Gulf grew by approximately 7%, while gasoline rose less than 2%, and diesel increased around 4.5%. New data also shows that US crude oil reserves are about 1.5% below their five-year average.
In Iran last week, while the dollar’s exchange rate remained fairly steady, prices generally rose in the free market. Even though there were vague reports at the end of the week about escalating tensions between Iran and the US in the Strait of Hormuz, the dollar fell in the free market, reaching 50,000 tomans. Last week, the majority of export bitumen transactions on the commodity exchange were conducted at close to the base price. However, the supply and demand for vacuum bottom was strong, and nearly all transactions were accompanied by price increases.
Furthermore, the rise in the price of oil products also affected Iran’s export bitumen price, resulting in a trading range of 273 to 283 dollars (last week 265 to 270 dollars) per bulk FOB Bandar Abbas, Iran, last week.
SUMMARY OF WORLD BITUMEN NEWS
Last week, the rate of asphalt for ground transportation increased in the northwestern sectors of Europe as July began. Furthermore, Mediterranean asphalt cargoes also felt the impact of the rising price of High Sulphur Fuel Oil (HSFO), which ignited an upward trend. Adverse weather conditions across Western Africa led to a reduction in road construction activities. Nevertheless, several cargoes were dispatched to Nigeria, Liberia, Senegal, and Angola.
Singapore’s asphalt price reached its lowest level since January 2022 last week. Some sellers in the country started the third quarter with high inventory volumes, which has had a negative impact on prices.
HIGHLIGHTS
• Following the announcement of production cuts by Saudi Arabia and Russia, the oil products market continued to operate within a stable range. Moreover, the prices of furnace oil strengthened due to the forecast of increasing demand.
• Singapore’s asphalt price remains at low levels, and prices in South Korea, China, and Bahrain were unchanged.
• The price of Iranian asphalt also increased in the commodity exchange. However, overall, due to weak demand, the asphalt prices in Iranian ports remained relatively stable.
• Indian refineries, due to the ongoing monsoon season and a significant decrease in demand, reduced their prices by $28. This price drop is forecasted to continue.
ANALYSTS LOOK AT THE MARKETS
The economists at Bank of America argue that although it appears that the country’s markets and economy are standing firm, there are three imminent events that could precipitate a recession in the United States this year. The bank’s economics team suggested in a note on Friday that recent data showing an upward trend in home and car sales and manufacturing is startlingly positive. The bank added, “Although these interest rate-sensitive sectors have performed better than expected, we still believe there are enough concerns to justify discussing a mild recession, starting in the first half of 2024.”
The three concerns that should be considered are:
The insolvency of regional lenders earlier this year, as a result of the Federal Reserve’s aggressive tightening measures, has made banks less willing to lend, which has created problems for credit markets.
Last month, the Supreme Court invalidated President Joe Biden’s student loan forgiveness scheme, and its likely resumption could potentially increase delinquency rates or delay loan repayments.
Job market growth has been primarily concentrated in lower-wage service jobs, leading to a decrease in labor productivity.
The Fourth Week Of June 2023
Last week saw crude oil prices fall by 3%, natural gas and coal by 7%, and steel and iron by 1.7%, largely due to aggressive signals continuously sent by central banks of major economies. Contrary to market expectations, the Bank of England raised its interest rate by 0.5% last week, signaling a continued increase in rates, even under stable inflation conditions. Other data released last week did not portray a favorable situation for major economies. Germany and the United States experienced significant drops in their PMI production and services indices, indicative of an economic contraction following several rounds of interest rate increases.
The situation was different in China. After Goldman Sachs lowered its prediction for China’s GDP growth following weak economic data in May, the People’s Bank of China was compelled to decrease its principal lending rate for the first time in the past year. According to Bloomberg’s monthly survey published on Friday, most economists expect the GDP growth of the United States to remain unchanged in the third quarter and decrease by 0.4% in the fourth quarter.
Amid these predictable events, new developments in Russia a day after the Indian Prime Minister’s visit to the United States could set the stage for new geopolitical risks in the energy market. It’s crucial to consider that any event in Russia, as one of the world’s largest oil exporters, can cause serious fluctuations in oil prices. Last week, the prices of furnace oil 180 and 380 in the Persian Gulf remained largely unchanged, while other petroleum products experienced a price drop of 5 to 9%. Additionally, new data indicated a reduction of approximately 3.8 million barrels in U.S. crude oil reserves, about 0.7% less than the seasonal average.
In Iran last week, there was no weekly change in the free dollar exchange rate. It appears that the free dollar continues to hover around its long-term support line at 48,000 tomans, with traders awaiting new information from nuclear negotiations. This week, the rate of risk-free bonds increased, indicating a growing demand for liquidity. The supply of export bitumen on the commodity exchange intensified last week, leading to a 1 to 6% reduction in bitumen export prices, while a decrease in the supply of vacuum bottom supported its price.
New base prices for petroleum products were set based on the remittance rate this week. Continued rainfall in Iran’s export markets, along with the decrease in bitumen on the commodity exchange, negatively affected the price of bitumen in Iranian ports. Consequently, last week, the price of bulk bitumen FOB Bandar Abbas, Iran, was set between 267 and 273 dollars (compared to 275 to 285 dollars the previous week).
SUMMARY OF WORLD BITUMEN NEWS
While crude oil prices decreased by around 3% last week, asphalt prices in European export points have increased due to seasonal demand growth and HSFO pricing. However, prices in Singapore and Iran have declined again due to weak demand, and domestic transport prices in the southern and central parts of Europe have remained almost stable.
Given the seasonal demand growth and limited supply in Southern Europe, demand from the Mediterranean has increased, and cargo prices in this area were associated with a gentle upward slope. The limited exports from Spain have pushed the FOB price of asphalt in this country compared to the FOB furnace oil in the Mediterranean by 2-3 dollars, increasing it to 30-35 dollars per ton.
The rainy weather in West Africa has affected the volume of cargo demand, especially in Nigeria, and the winter in the southern hemisphere has impacted the activities and supply of asphalt. With the arrival of seasonal rains in India, all road construction activities in South Asia have been affected.
HIGHLIGHTS
• Seasonal rains and unprecedented storms in the western strip of India have affected road construction. Market participants expect that, given the current conditions, demand will continue to weaken.
• Indian refineries are predicted to reduce their prices again on July 23rd.
• Prices in Iran remained relatively stable, but due to the strengthening of the rial and increased competition in exchange markets, prices are forecasted to rise.
• Bahrain has increased its price by $20.
• Last week, crude oil prices were bolstered by forecasts of increased demand and the impact of improved housing construction on the U.S. economy, although concerns about demand continue to be observed in the market. Also, with the improvement of crude oil prices, furnace oil prices were also supported.
ANALYSTS LOOK AT THE MARKETS
According to Tom Lee, despite fears of a potential recession, the economy still seems primed for growth, which is evident with the recent surprising surge in housing construction and an improved outlook for corporate earnings. He stated: “The second-quarter corporate earnings season is underway, and more strategists suggest that the year-over-year growth in EPS for old energy-centered companies could be positive, and this would be a beneficial transformation for risk reduction.”
Lee expects that forthcoming data will bolster his perspective that the economy remains in an expansionary state. The June employment report could indicate a sustained strength in job improvements, and inflation reports may suggest a consistent decrease.
The Third Week Of June 2023
In an unexpected week, the price of Brent crude didn’t experience a strong upward trend, despite the Federal Reserve ceasing its contractionary policy. The 2% increase in crude oil prices, along with the closing price for the week falling within the range of the past four weeks, dimmed hopes of an increasing price trend. Major institutions shifting their oil price forecasts for 2023 can be seen as a result of this development. This week, alongside the rise in crude oil prices, natural gas prices increased about 9%, and steel and copper prices saw a weekly increase of around 1 to 2%. This was due to the US inflation data indicating a slowdown in inflation trends; although many analysts expressed doubt about the continuation of this decrease in inflation due to its stickiness, the downward trend of the dollar index strengthened commodity prices. China’s interest rate cut, along with no increase in the US rate, raised market optimism for a continued rise in oil demand. Next week’s economic statistics will largely focus on the housing and construction conditions in the US, which can provide a clearer view of the country’s economic conditions in the coming months.
During the week, the price of Persian Gulf 180 furnace oil remained almost unchanged, while the price of 380 furnace oil increased by about 1%. Prices for gasoline and diesel in the Persian Gulf increased by approximately 1% and 3% respectively. Moreover, new data showed that US crude oil reserves increased by approximately 8 million barrels and are now about 0.6% below the seasonal average. Also, US crude oil production for the week ending June 9 remained unchanged at its highest level in the past three years, at 12.4 million barrels per day.
In Iran, the trend of price decreases continued; the dollar maintained its declining trend from the previous week, although slowly, and oscillated around its long-term support line at about 48 thousand tomans. Interbank interest rates did not change this week, and their resistance to levels below 23.5% is indicative of the money market conditions. The supply of vacuum bottoms and export bitumen in the commodities exchange revived last week, and the increase in supply resulted in a 3 to 15% decrease in the price of vacuum bottoms and export bitumen compared to two weeks ago. However, this price decrease did not cause a negative reaction in Iran’s export markets and the price in Iranian ports decreased by only about 2%. Last week, the price of bulk bitumen FOB Bandar Abbas, Iran, ranged from $275 to $285 (compared to $280 – $290 last week).
SUMMARY OF WORLD BITUMEN NEWS
Last week, the market was plunged into uncertainty due to a decrease in the prices of shipments from Iran and Singapore on one hand, and an increase in prices in South Korea and Rotterdam on the other. It appears that the high inventory levels in a significant number of bitumen consuming markets in the Asia region accompanied this event. However, market conditions in India were different, with prices witnessing a decrease of $34 – $35.
The prices for bulk and barrel bitumen shipments from the Middle East to destinations in East Africa were supported by price increases in Spain and the Ivory Coast compared to the Mediterranean. Moreover, construction activities in some key markets, especially Nigeria and South Africa, remained at lower levels despite rainfalls and colder weather.
HIGHLIGHTS
• Refineries in India, after several stages of price reductions in recent weeks, seem set to lower their rates again in the next two days. Given the global low prices and weak demand, prices are expected to drop more than $30 – $35.
• The price of bitumen in Singapore fell this week, but the situation was slightly different in the South Asian markets, where, for instance, prices in South Korea were supported.
• Bahrain continues to hold its prices steady at $370, consistent with the last eight weeks.
• In Iran, bitumen prices were weak this week amidst weak demand and decreasing competition among traders.
• The expected interest rate cut by the US Federal Reserve was anticipated to support oil prices to some extent, but the price increase was less than expected.
• Concerns about weak demand for furnace oil continue to grow, leaving the rates for this product at low levels.
ANALYSTS LOOK AT THE MARKETS
Nouriel Roubini, an economist also known as Dr. Doom, has doubled down on his dire warnings about the United States, saying that the country, with its combination of higher interest rates, sticky inflation, and reduced credit, is pushing the economy towards a recession. The New York University professor told Yahoo Finance in an interview on Thursday, “I’m saying a hard landing – that is, at least two consecutive quarters of negative economic growth – is more likely than a soft landing.”
Roubini stated, “The economy is slowing down, the Federal Reserve has raised rates, and in my view, they need to raise rates more because inflation is still very high.” However, even with a decrease in inflation rates, economists like Roubini are not optimistic. This is due to concerns about sticky inflation – a situation where prices are resistant to change. According to Roubini, this means that the Federal Reserve will likely raise interest rates in the months of July and September.
Roubini declared, “There will definitely be a recession. Whether this recession is short-term and shallow, rather than deeper, depends on many factors.”
The Second Week of June 2023
Last week, Brent crude oil experienced a roughly 1% decrease while natural gas and coal prices fell more than 10%. This trend in pricing reflects the market’s view of geopolitical risks and the filled natural gas reservoirs in developed countries. At the start of last week, economic news from China and the Eurozone indicated improvement and helped maintain Brent oil prices.
Economic data revealed a decrease in Germany’s inflation rate and the unemployment rate in Eurozone countries. Bloomberg also reported that the Chinese government is working on a range of new measures to support the stock market. At the end of the week, the announcement of the U.S. unemployment rate increasing from 3.4% to 3.7% supported oil prices as it reinforced predictions of a halt to the Federal Reserve’s contractionary policy.
Furthermore, released data indicated a half-percent increase in the average hourly income of U.S. manufacturing employees, reaching $28.75, which painted a positive outlook for oil demand. This week, following contradictory statements from Saudi Arabia and Russia regarding setting a new oil production ceiling, OPEC+ will make a decision on this matter on Sunday and Monday. It seems traders do not anticipate a significant decision from the OPEC+ meeting due to Russia not fulfilling its threat to reduce production.
Last week, Persian Gulf furnace oil prices (grades 180 and 380) decreased by 5% and 4% respectively, and Persian Gulf gasoline and diesel prices fell about 3%. Moreover, last week’s data showed that U.S. crude oil reserves increased and are now around 2% below the seasonal average. Also, U.S. crude oil production declined by 0.8% to 12.1 million barrels per day.
In Iran, the free-market dollar remains above 50,000 Tomans, and the publication of positive news from diplomatic negotiations to strengthen relations between Iran and America did not significantly affect foreign exchange rates. This week, the rates of the T.A. Exchange System and currency (notes and drafts) also decreased slightly less than 1%, indicating that the trend in the free market also affected demand in the exchange market.
Like the previous week, the price trend for vacuum bottom and export bitumen was downward in the commodity exchange, and the prices of vacuum bottom from Tehran, Esfahan, and Shazand refineries decreased by about 10% weekly. Export bitumen in the commodity exchange also faced a decrease in demand, and except for bulk oil transactions of Jey Esfahan, all other transactions were at the base price and decreased by 2 to 6% weekly.
The downward trend of the commodity exchange also found its way to Iran’s export markets, and the price of bulk bitumen FOB Bandar Abbas, Iran, was in the range of $297 – $307.
SUMMARY OF WORLD BITUMEN NEWS
Last week, price trends in the African region were downward, and prices were unclear in the Middle East and Asia. Following the decrease in the price of Iranian export consignments, the value of exports to East Africa declined. In the European sectors, the price ratio of bitumen consignments to HSFO FOB Rotterdam increased by 7-8 dollars, settling in the range of 55-60 dollars. The reason for this increase is the limited supply and accelerated growth of seasonal demand in Europe.
This was concurrent with a decrease in transportation rates in Germany and a downward trend in bitumen prices in France and the UK. In the Mediterranean area as well, the value of consignments decreased, and the price ratio of bitumen consignments FOB Spain to HSFO Mediterranean increased by 7-8 dollars, settling in the range of 25-30 dollars.
HIGHLIGHTS
- Bahrain did not change its prices this week either, and the price of bitumen in this country is still 370 dollars.
- Prices in Singapore did not experience much change last week.
- In Iran, prices came under pressure due to the decrease in the value of vacuum bottom (VB) and the devaluation of the rial.
- Indian markets continued to import their consignments, and reserves were at high levels in the ports of Akra. It is predicted that refineries in this country will decrease their prices by 30 dollars per ton for June.
- After a decrease in the price of crude oil and considering the problems with the U.S. debt ceiling and the uncertain position of OPEC, furnace oil and diesel prices did not receive much support.
ANALYSTS LOOK AT THE MARKETS
Ray Dalio, the founder of Bridgewater Associates, was not swayed by the debt ceiling agreement, stating that the provisional deal doesn’t solve the issue of the heavily indebted U.S. government continuing to borrow more and more money. Dalio added, “It’s a game that acts like a group of alcoholics who write rules to limit their drinking.”
“When they reach a limit, they negotiate a temporary removal of the restriction that allows them to have their next drink until they reach the next limit,” he continued. If their agreement is approved by Congress, it promises to prevent a potentially disastrous default that Treasury Secretary Janet Yellen had warned could occur in early June.
According to the U.S. Treasury, lawmakers have acted 78 times since 1960 to increase or extend borrowing limits, which has led Dalio to criticize the concept of the debt ceiling in the past.
The First Week of June 2023
Last week, new variables entered the market, potentially disrupting the predictable trend of prices. Conflicting statements by Russia versus those by Qatar and Saudi Arabia, coupled with the ongoing debt ceiling disputes in the United States, have introduced new risks to the market. These coinciding events suggest that the next two weeks could introduce a new chapter in oil price trends.
Tracking data from Bloomberg indicates that Russian crude oil exports in the four weeks ending on May 21 were over 480,000 barrels per day, more than the four weeks ending on February 26, reaching close to 4 million barrels per day.
Factors expected to influence the markets in the coming week include India’s reduction of crude oil imports by 8.3 percent in April and an increase in the amount of crude oil stored on idle oil tankers. Amidst falling exports of Indian petroleum products, the country’s refineries have limited their operational rates, resulting in a reduction of imports.
Vortexa reported on Tuesday that the reserves of ships that have been stationary for at least a week have increased by 1.3 percent, reaching 91.15 million barrels. Last week, the price of furnace oil in the Persian Gulf (180 and 380) both fell by approximately 4 percent, while gasoline prices remained unchanged, and the price of Persian Gulf diesel fell by around 2 percent. Moreover, last week’s data showed that U.S. crude oil reserves were about 3 percent lower than the seasonal average and that the country’s crude oil production had increased by 0.8 percent to reach 12.3 million barrels per day.
In Iran, the value of the rial strengthened slightly due to parliamentary instructions to the government not to fix the exchange rate, reducing market risks, but the dollar exchange rate in the free market remained above 50,000 tomans. This week, the exchange rates (note and remittance) had a fluctuating trend after two weeks of stability, indicating that the government’s plan to stabilize the exchange rate has been cancelled.
There was also a downward trend in the commodity exchange this week, as the supply of vacuum bottom from Shiraz oil refinery fell by about 13 percent, and the rest of the vacuum deals also fell by 1 to 2 percent on a weekly basis. The export bitumen price in the commodity exchange was mostly traded at the base price, and some offers remained unsold due to lack of demand.
This downward trend was also evident in Iran’s export markets, with the price range of deals falling from the range of 315 to 330 dollars last week to the range of 310 to 320 dollars.
A SPECIAL EXAMINATION
Based on the latest information, demand for gasoline is expected to rise this week, as travel plans for Memorial Day in the United States (May 25-29) are projected to increase by 7% compared to the previous year. It is anticipated that the amount of travel in the United States will reach the highest level in four years, with about 42 million Americans travelling during this week. This is just the beginning, and as we head into the warm season, we may also see an upward trend in trips to Europe. Everything appears normal so far – hot summer, increased gasoline consumption, and ultimately the growth of gasoline crack spread. Let’s see how Western countries will deal with the challenge of increasing gasoline demand.
By observing the first few episodes, it seems we could predict the end of the story. The trend of the gasoline crack spread compared to the 380 fuel oil in the year 2022 shows a significant difference from this year.
Episode One: Last spring, like this year, saw a significant increase in travel, but these travels did not have a severe impact on the crack spread of car and aircraft fuels. In contrast, this year’s crack spread for these two products is highly volatile, as if the market is struggling to quickly supply gasoline or aircraft fuel.
Episode Two: In spring 2022, the fuel oil crack spread experienced severe fluctuations, as if the market was struggling to supply fuel oil, even though there was no discussion of sanctions on Russian oil products. But this spring, the fuel oil crack spread fluctuations are significantly lower.
Episode Three (Conclusion): As last year’s fuel oil fluctuations were a sign of countries’ efforts to increase this product’s reserves in the face of the crisis conditions of Russia’s gas cut-off, it appears that this spring’s gasoline crack spread fluctuations are also a sign of increasing the level of this product’s reserves (to deal with the crisis of sharp demand growth). As the pressure of Russia’s gas cut-off subsided, the price of fuel oil was suppressed in the summer of 2022, so it is likely that unless something special happens on the supply side of crude oil, it won’t be a good summer for gasoline prices.
SUMMARY OF WORLD BITUMEN NEWS
Last week, bitumen prices increased in many parts of Europe due to the seasonal increase in demand in the southern regions of Europe, alongside refinery shutdowns for maintenance, and restrictions in the supply of bitumen, leading to a rise in Rotterdam cargoes. The premium of Spanish and Ivory Coast bitumen cargoes over fuel oil reached higher price levels compared to last week. In Africa, prices did not follow a specific trend. Meanwhile, the price of Iranian barrel and bulk export cargoes decreased, and the forecast for decreased demand led to lower bitumen prices in Singapore. Moreover, due to the refinery maintenance in this country, the outlook for supply from Singapore is weaker than in the past.
HIGHLIGHTS
• Fuel oil and diesel prices began to rise, showing signs of increasing demand.
• In Singapore, bitumen prices were slightly supported due to increasing concerns about supply in the coming months.
• Bahrain continues to hold its prices steady at $370.
• Limited demand for Iranian cargoes led to a decrease in prices. Furthermore, concerns about a decrease in demand with the arrival of the rainy season in Iran’s traditional markets in June impacted transactions.
• After a $8 decrease in price by Indian refineries, it is predicted that prices will further decrease by $25 this week. This price drop, along with limited demand and high domestic inventory levels, significantly impacted both the volume and price of transactions.
The Fourth Week Of May 2023
Last week, while natural gas prices experienced a decline of approximately 10%, crude oil prices showed an unbalanced upward trend of about 2%. The reason behind this occurrence was attributed to mild weather conditions and a decrease in gas supply, particularly in Asia, for natural gas. As for oil, it was mentioned that the United States decided to replenish strategic reserves, and there was also a forecast of a 2-million-barrel increase in oil demand. All of these trends took place in a context where the dollar index had a growth of 0.5%, and petroleum products experienced an upward trend. Although the overall trend for oil was positive, Brent crude oil prices faced a daily decrease of over 2% on Friday due to concerns about potential US debt defaults and the sudden halt in debt ceiling negotiations on Friday. Prices dropped below $75.5 per barrel. On the supply side, there were risks that emerged last week, including wildfires in major oil-producing regions in Canada and the seizure of oil tankers by Iran. In the past week, the price of Kuwaiti crude oil showed a growth of 2% and 4% for 180 and 380 varieties, respectively. Moreover, the prices of gasoline and diesel in the Persian Gulf region saw an increase of approximately 6% and 5% respectively. Data from the previous week indicated an increase of approximately 5 million barrels in US crude oil inventories. After a significant decline in vacuum prices last week in Iran, prices rebounded this week, and the average price of this product reflects a decrease of 5% to 10% compared to two weeks ago. The price of exported Iran bitumen in the commodity exchange market also showed a weekly decline of 2% to 3%. This downward trend was also present in Iran’s export markets, where the price range decreased from an average of $330 per ton in the previous week to a range of $315 to $330 per ton.
A SPECIAL EXAMINATION
Acemoglu (Nobel laureate in economics) and Janet Yellen, together, formulated a general principle in economics, indicating that firms increase prices during an increase in demand but do not change prices during a decrease in demand. They demonstrated that this strategy is “almost rational” in the sense that firms adopting this strategy earn significant profits compared to a situation where prices adjust immediately. They also showed that the impact of a large number of firms adopting this strategy would be noticeable. Over the past six months, the price growth of Iranian bitumen provides evidence for this claim. Iranian exported bitumen prices have become nearly equivalent to the regional prices since the last week of December and before the Persian New Year. This can be attributed to Iran’s agreement with Saudi Arabia and a reduction in sensitivities in the region regarding trade with Iran, which increased the demand for Iranian bitumen. However, the change in this behavior in recent weeks is noteworthy. While there have been no new geopolitical developments for Iran, and the supply and demand dynamics in the region have not affected the price of bitumen in major Asian ports, the significant price drop of Iranian bitumen compared to Bahrain requires serious consideration. It appears that the domestic market has become bearish, following the emotional behavior of Iranian exporters, leading to a disruption in the previous coordination among Iranian exporters and resulting in abnormal behavior that could cause significant losses for the country. According to the Acemoglu and Yellen theory, during the period of increased demand for Iranian bitumen in the past season, Iranian exporters increased prices to the extent that the irrational gap between Iranian and Bahraini prices disappeared. Now, if the decrease in the price of Iranian bitumen is due to a decrease in demand, a proportional decrease should be observed between Bahrain and Iran. However, the Acemoglu-Yellen theory overlooks another aspect, which is the emotional intervention of higher-level authorities and the transmission of these emotions to firms, disrupting the intellectual unity of this group and creating a conducive environment for rapid price declines.
SUMMARY OF WORLD BITUMEN NEWS
In the past week, prices of shipments in the Asian region experienced an increase. However, in other areas such as Europe, prices did not follow a clear trend, and Iranian shipments faced a decline. The gradual start of the construction season in Scandinavian countries led to an increased demand for cargo in these regions. The price differentials of premium Turkish and Greek bitumen shipments compared to HSFO FOB Med cargoes strengthened with the entry of Motor Oil Hellas refinery in Greece into the maintenance season. Furthermore, the prices of premium cargoes to Italy, Spain, and the Ivory Coast remained unchanged compared to the previous week. A steady flow of Med cargoes was observed to meet the demand of Southern European countries. Flooding in central Italy disrupted construction activities and cargo deliveries, while heavy rainfall in Nigeria slowed down operations. Finally, several shipments were sent to South Africa, attributed to seasonal demand and the replenishment of Natref refinery stocks.
HIGHLIGHTS
• After three consecutive weeks of price decline, oil prices slightly increased following the release of news related to the replenishment of US crude oil inventories and expectations of increased demand. On the other hand, prices of furnace oil and diesel decreased after the release of weak data from China.
• Bitumen prices in Singapore experienced a slight increase this week. It is expected that prices will decrease again with further weakening of furnace oil.
• Prices in Bahrain remained unchanged.
• In Iran, bitumen prices faced a decrease due to weak demand from India and trading companies’ efforts to increase supply. However, the value of the Iranian rial slightly strengthened.
• Indian refineries reduced their bitumen prices by $8, and it is predicted that this decrease will continue in June.
The Third Week Of May 2023
In a tense week prior to the Federal Reserve meeting, the oil market experienced a 6% decline in prices. However, the release of monthly inflation data, which indicated a 0.4% increase for the United States, and the significant drop in the US Consumer Sentiment Index regarding the country’s economic future did not have a notable impact on the market. As a result, Brent crude oil prices concluded with a decrease of approximately 1.5%. Despite this, OPEC expressed a secondary concern regarding supply risks and anticipated a decrease in production in the second half of the year. However, they decided to maintain their tools for future use due to increasing business risks as Washington approaches the federal debt ceiling. If the US Congress does not increase the government’s borrowing limit soon, the stock market, bond market, and currency market may encounter difficulties, leading to financial problems for the government and potentially triggering a new cascade effect.
Data from the previous week showed an increase of approximately 3 million barrels in US crude oil inventories. Additionally, during this week, the price of Arabian Gulf crude oil (180 and 380) experienced growth of 8% and 6% respectively, while gasoline and diesel prices in the Gulf region increased by approximately 1% and 2%. Moreover, most refined products in the Gulf region experienced growth. In the Iranian free currency market, there was no significant change, and the official foreign exchange market remained stable. However, in the commodities exchange, the trend differed from domestic and international markets, experiencing a sharp decline. Simultaneously with the growth in Arabian Gulf crude oil prices, the final price of exported bitumen in some transactions decreased by up to 8%, and vacuum bottom bitumen experienced a price drop of over 40% in two transactions. This decline resulted in increased pressure on bitumen prices at Iranian export ports, reaching approximately $330. The lack of clarity in exchange rate policies and the absence of clear mechanisms prior to public announcement of these policies led to market turmoil in the country’s commodity market. It is likely that with the increase in commodity trading in the commodities exchange and the clarification of reasons for the price decrease, the price of Iranian exported bitumen will increase again.
SUMMARY OF WORLD BITUMEN NEWS
In the past week, prices for asphalt shipments increased in Asia and Europe. Despite the rise in asphalt prices in Singapore, orders from Indonesia and Vietnam were not particularly favorable. Additionally, the recent decline in freight rates in China continued due to increased asphalt production. The price of asphalt shipments from the Middle East was accompanied by a higher HSFO rate, but the transportation of cargo from the Middle East to Europe weakened due to a decrease in price spreads. Moreover, the prices of shipments to West Africa increased as a result of the growth in prices of Iranian exported barrel cargoes, but overall, rainy weather reduced demand in western and southeastern African regions.
HIGHLIGHTS
• In the past week, crude oil prices remained unaffected due to negative market expectations ahead of the announcement of the inflation rate in the United States. Additionally, the price of furnace oil weakened slightly in line with crude oil.
• Asphalt in Singapore showed signs of returning to an upward trend, leading to price strengthening.
• Rates in Bahrain remained unchanged.
• Following the decline in crude oil and furnace oil prices, asphalt prices in Iran also experienced a slight decrease compared to the previous week. It is predicted that prices will stabilize in the coming week, but a decrease in demand from India is also evident.
• With increased accessibility and rainfall in certain parts of India, asphalt prices decreased, and it is also predicted that refineries will reduce their prices by $7 to $9 per ton in the coming week.
ANALYSTS LOOK AT THE MARKETS
In fact, US sanctions have had a significant and fundamental impact on the use and dominance of the dollar in global markets. The United States has utilized sanctions over the decades, along with blocking all of Russia’s foreign reserves, which has served as a deterrent to dollar detachment once again. Central banks have reduced their reliance on the dollar and significantly increased their purchases of gold in the past year. Katz believes that despite increased use of sanctions, the level of dollar reserves has remained around 60% since 2008, and the international use of the dollar reached 88% in 2022. The demand for the dollar will continue to exist due to sanctions.
First and Second Weeks of May 2023
Last week’s collection of analyses and news revolved around the weakening of the global economy, causing Brent crude oil prices to lose about 6% of their value ahead of the Federal Reserve meeting. Positive news about unemployment reduction in the United States only slightly mitigated the oil price drop after the meeting. Alongside this event, American oil export statistics were released, showing an increase from 4 to 4.5 million barrels per day. Kepler data also showed Russian oil exports grew from 3 million barrels in March to 4 million barrels in April. These statistics indicate an escalating tension between these two countries, competing for each other’s market share. This supply increase, while Iraqi Kurdistan’s oil exports remain halted, is expected to further increase negative market fluctuations and disrupt supply-demand balance. Last week’s data showed a decrease of about 1.2 million barrels in the U.S. crude oil reserves, which aligns with the country’s growing oil exports.
This week, the prices of Persian Gulf furnace oil (both 180 and 380) decreased by 8%, and the prices of gasoline and diesel dropped by 5% and 4% respectively. The crack spreads of naphtha, diesel, and 380 furnace oil increased, while those of gasoline and 180 furnace oil declined. Alongside the decline in crude and furnace oil prices in the Persian Gulf, the final price of export bitumen fell by about 2%, and vacuum bottom also experienced about a 5% price decrease. The price of bitumen in Iran’s ports also decreased by approximately $5 last week, with most transactions conducted in the $340 to $350 range. It seems that the slowing trend of Rial devaluation and the decrease in commodity exchange prices have managed to strengthen competition in Iran’s export market. It is predicted that if the declining trend of crude oil prices continues this week, Iran’s export bitumen prices will also be affected.
SUMMARY OF WORLD BITUMEN NEWS
The prices of export cargoes of bitumen in Europe, Singapore, and Iran have declined, while domestic transportation costs in Europe began to increase at the start of May. In the Mediterranean, although the price of bitumen and HSFO came under significant pressure parallel to crude oil prices, the price differential between bitumen cargoes and HSFO remained unchanged. In Asia, demand from key markets such as Indonesia, Vietnam, and southern parts of China was under strain, and supply forecasts for June indicated a decreasing trend.
The level of construction activity and price trends in Africa were somewhat unclear, given the noticeable decrease in the price of import cargoes to various destinations on the continent. Nevertheless, domestic transport rates in South Africa experienced growth.
HIGHLIGHTS
• Crude oil prices fell amid increasing concerns following the release of weak economic data from China and predictions of rising interest rates.
• Also, furnace oil and diesel prices were pressured due to weak economic recovery.
• With the decline in the value of crude oil and furnace oil, Singapore bitumen prices were affected due to the lack of buyer participation.
• Prices in Bahrain remained unchanged compared to last week.
• The depreciation of the rial impacted Iranian bitumen prices, leading to a decrease in prices compared to the previous week, and buyers did not participate in the market amidst the decline in the value of crude oil and furnace oil.
• Refineries in Western India reduced their prices by $17, while prices in other parts of the country increased by $2.5. It is predicted that, if the decline in crude oil prices continues, Indian refineries will naturally reduce their prices.
ANALYSTS LOOK AT THE MARKETS
The political impasse in Washington over the increase in the country’s $31 trillion debt ceiling has driven the cost of insurance against a possible default to a new peak on Thursday. Mark Zandi, Chief Economist at Moody’s Analytics, stated that the Republicans’ proposal to lift the debt ceiling slows the economy and heightens the risk of recession. In a statement to the Senate Budget Committee on Thursday, Zandi warned that the proposed cuts could reduce employment by around 800,000 jobs by the end of 2024 and bring the unemployment rate from 3.5% to near 5%. He also said that, by 2024, economic growth under the Republican bill would decrease to 1.61%, while current forecasts are 2.23%, and added that the GOP agreement significantly increases the risk of recession.
The United States has never defaulted on its debt, but it appears that investors are worried about this risk and no agreement has yet been reached by legislators. Janet Yellen, the U.S. Treasury Secretary, has warned that the U.S. may run out of money to pay its bills by early June, which could trigger an unprecedented economic crisis.
The Fourth Week Of April 2023
Crude oil prices continued their downward trend last week following weak economic growth data from the United States and Germany. On Friday, the latest preferred inflation data from the Federal Reserve, the Personal Consumption Expenditures (PCE) index, showed that prices had increased by 4.2% over the past year and had not decreased on a monthly basis. This added to the speculation of a US interest rate hike in May. If the Federal Reserve continues to raise interest rates to curb inflation, it could deal a more severe blow to the economy and banks.
Last week, Bank of America predicted that an economic recession will begin this quarter, based on related recession indicators. The bank’s analysts stated that an economic recession usually begins six months after the inversion of the 2-to-10-year bond yield curve. Given the occurrence of this inversion in November last year, the recession is expected to arrive in May. The declining trend in oil prices is occurring while the export of oil and oil products from Iraqi Kurdistan is still involved in disputes between Turkey and the Kurdish regions of Iraq, and the fragile ceasefire in Nigeria is experiencing unstable conditions.
Last week’s data showed that US crude oil reserves decreased by about 5 million barrels. In other words, the increased supply of oil from US reserves managed to overcome supply-side risks, particularly the crisis in Nigeria. Last week, the prices of Persian Gulf fuel oil (180 and 380) both decreased by 2%, and the prices of gasoline and diesel in the Persian Gulf each decreased by 4%. The crack spread of gasoline, diesel, and 180 fuel oil also dropped. In Iran’s free currency market, there was a significant increase in the US dollar exchange rate, although the official markets remained indifferent to this trend and continued to decline.
Simultaneously with the decline in crude oil and fuel oil prices, the final price of export bitumen transactions experienced a 3 to 6 percent drop in the commodity exchange, and vacuum bottom transactions were mostly accompanied by a decrease in prices. Bitumen transactions in Iranian ports did not change significantly last week and were traded at a price of $345 – $355, which also halted the upward trend of prices in the commodity exchange. Considering the support level for crude oil prices, it seems that bitumen and fuel oil prices have resisted the negative fluctuations of last week and are waiting for a clear trend in crude oil prices before changing.
SUMMARY OF WORLD BITUMEN NEWS
Last week, disruptions between Iraq and Turkey regarding oil exports from Iraqi Kurdistan had an impact on bitumen production in the south and southwest of Germany, Austria, and Serbia. With the decline in HSFO prices, the price of bitumen cargoes in the Mediterranean region decreased, while prices in Turkey and Italy resisted the decline in crude oil and fuel oil prices. Overall, European bitumen prices followed a downward trend, while in Asia and Oceania, prices remained relatively stable due to reduced demand, unfavorable weather conditions, and festivities related to Hari Raya in countries like Indonesia and Vietnam. Domestic prices in China also declined due to decreased demand and adverse weather conditions.
HIGHLIGHTS
• As the liquidity market weakens and uncertainty about the global economic situation continues, oil prices have declined.
• Following the decrease in crude oil prices, the prices of fuel oil and diesel have also decreased. It is expected that prices will remain at these levels until positive news is received from China.
• The lack of buyers in the market led to a decrease in bitumen prices in Singapore.
• Vacuum prices in Iran changed last week, affecting bitumen transaction prices. Although some traders offered lower prices, competition persisted to keep prices high.
• With the peak of construction projects in India, the country’s demand remained at high levels. It is predicted that prices will not change this week after the country’s refineries increased prices for two consecutive weeks.
ANALYSTS LOOK AT THE MARKETS
Larry Summers believes that it does not seem likely that inflation will decrease to the Federal Reserve’s target anytime soon. On Wednesday, at the Morningstar Investment Conference, he stated that “the financial stimuli used during the COVID era and very low-interest rates for a long time have pushed US inflation from 2% to 5%.” “It was clear that this situation would eventually overflow. In my opinion, we have a tough path ahead to achieve 2% inflation, and as long as economic growth does not decline, this target will not be realized.” He continued, stating that the central bank has been fighting inflation and the right action for the Federal Reserve would be to increase the interest rate by 0.25% in next week’s meeting. Despite the difficult conditions the Federal Reserve has been facing, and considering the banking crisis, Summers remains optimistic about the US economy.
The Third Week Of April 2023
The price of oil and petroleum products rose last week due to continued supply risks and a decline in the value of the dollar. The monthly reports of OPEC and the International Energy Agency were also released, both emphasizing an increase in global demand by over 2 million barrels per day this year. These events caused Brent oil prices to rise by 1.7% for the week, reaching over $86. News from last week indicated that crude oil flow from Kurdistan, Iraq has not yet resumed and 450,000 barrels per day of oil exports are still halted. This resumption of exports could pose a threat to the growth of oil prices. On the other hand, statistics have shown that Saudi Arabia has not yet taken any action to reduce its production. Special Presidential Envoy for Global Energy Security, Amos Hochstein, met with Saudi officials, including Crown Prince Mohammed bin Salman, on Friday to discuss energy security. These events could increase market ambiguities as the agreement between Middle Eastern countries and Western or Eastern countries remains in question. Last week, the monthly inflation rate in the United States was less than expected, and the trade balance statistics of China were unexpected, showing a 15% increase in exports. It appears that in March, China, which received a significant amount of Russian oil, exported many refined products, especially to Asian countries, strengthening China’s trade balance.
SPECIAL REVIEW
Dryness in the grasslands of Europe and rain in the asphalt deserts of Asia are the two opposite weather patterns that have been affecting the logistics market in various ways. After a year since the Russia-Ukraine war, all aspects of the war have been examined and the disruption of Russian exports has caused logistics developments in many markets. However, in some seasonal markets such as the tar market, we are at the beginning of a change with the arrival of hot seasons. In Europe, with the start of construction work, it is expected that tar purchasing and storage will increase the price in these areas. It seems that when European policymakers were indifferent to the price of tar in the middle of winter, the market was also small. But in the past few weeks, the victory of tar in the port of Spain over the port of Singapore is the only sign of a good season for tar exports to Middle Eastern markets, as about 4 million tons of Russian tar will no longer be coming to Europe, and the Middle East may be a new route for tar exports to global markets. The above chart shows that the price of tar in Spanish ports has increased since about 4 weeks ago and, while Spanish tar has always been inferior to South Korean tar, the decrease in supply in European ports will lead to a sharp increase in prices in Europe. Although it is expected that the price of Spanish tar will be controlled in April with the increase in exports from Asian ports, this surge in price reminds us of two points: 1) European tar reserves are at a minimum and 2) demand for tar has recently emerged in Europe and has not yet found stable trading partners.
SUMMARY OF WORLD BITUMEN NEWS
In the coming two weeks, road construction activities in Europe will increase after the end of Easter holidays, while demand in the Mediterranean, Asia, and the Middle East regions will decrease in April due to the upcoming month of Ramadan and Eid al-Fitr. The protests in France have decreased to some extent as the country’s refineries and ports continue their activities. The price gap between bitumen and HSFO in Italy, Spain, and Turkey remained unchanged, but in Greece, it increased by 3-2 dollars, reaching 5 dollars per ton. South Africa continued to import large volumes of bitumen cargoes, most of which came from Bahrain. In Asia, particularly in Singapore, the price of bitumen did not change significantly compared to the previous week.
HIGHLIGHTS
The prices of bitumen in Singapore remained stable this week, while the prices in Bahrain increased by $15. Despite the increase in the value of the Iranian rial, the prices of bitumen in Iran have remained unchanged. Although the logistics situation for importing bitumen to India has improved, the prices of bitumen in the country have increased, and it is predicted that Indian refineries will increase their prices by $16 in the coming week. After a growth in the previous week, crude oil prices remained relatively unchanged with the release of inflation statistics in China and signs of a decrease in demand. However, markets predict that if crude oil reserves in the United States decline, the upward trend in oil prices will resume.
ANALYSTS LOOK AT THE MARKETS
On Friday 4-20-2023, Jimmy Dimon warned investors about the “storm clouds” looming over the US economy caused by the “thunderstorms” of the financial markets. He added that the US economy is generally in good shape. Consumers continue to spend, their balance sheets are strong, and businesses are in decent shape. However, there are still “storm clouds” on the horizon and the banking industry is increasing its exposure to market risks. The conditions of the banking system are not similar to those of 2008, given the involvement of fewer financial actors. Nevertheless, as lenders work harder, financial conditions will become more difficult.
First and Second Weeks of April 2023
The Brent crude oil price remained at around $85 per barrel until Saturday, April 9th, after the unexpected news of OPEC+ reducing its daily production by more than 1 million barrels in the past week. Last week’s US job market data and the business confidence index also showed signs of a weak job market and managers’ lack of confidence in the future of the US market, increasing the risks of a recession in the country. OPEC+ recent decision will change the assumptions about the trend of increasing interest rates in Western countries, as they will need to increase interest rates again to fight inflation. Last week, Brent crude oil prices rose by about 8%, and the price of Persian Gulf crude oil increased by 11% to $380. Last week’s data showed that US crude oil reserves increased by 3.75 million barrels.
SPECIAL REVIEW
After OPEC’s announcement regarding its plan to reduce its production, crude oil prices faced an increase worldwide, leading to a rise in furnace oil and diesel prices. Asphalt prices in Singapore remained unchanged with steady demand, while it is predicted that the increase in oil prices will also have an impact on asphalt demand. Prices in Bahrain remained unchanged. The increase in crude oil prices and domestic supply difficulties had an impact on Iran’s bulk bitumen prices, leading to an increase in prices. However, the prices of bitumen in barrels remained unchanged due to the lack of participation by Indian buyers. Considering the global price hike and domestic demand growth, it is predicted that Indian refineries will increase their prices again on April 15th after raising their prices by $20.
SUMMARY OF WORLD BITUMEN NEWS
In the past week, bitumen prices have increased in Europe due to rising crude oil and bunker prices as well as growing demand, while prices in Asian regions have experienced a slight decrease. In France, limited supply and strikes have led to a price hike in bitumen. In the first week of April, the rate of bitumen shipments to West and South Africa increased and the domestic prices of bitumen-carrying trucks in South Africa showed a significant rise after monthly review. Bitumen prices in Singapore also faced a slight decrease due to decreased demand from major countries such as Indonesia, Vietnam, and southern parts of China.
FORECASTING THE PRICE OF OIL AND OIL PRODUCTS
Last week, the main focus of the market was on the sudden decrease in OPEC+ production, resulting in financial institutions such as Goldman Sachs predicting an increase in oil prices and analysts expecting the momentum to continue upward. Additionally, with the rise in oil prices, petroleum products have faced price growth in many parts of the world.
ANALYSTS LOOK AT THE MARKETS
On April 7th, Mohammad Alrian announced that the US job report for March showed a slowdown in hiring, and the economy needs to strengthen the stock market and urge the Federal Reserve to increase interest rates in the fight against inflation. He also added that, based on the reported numbers, there is currently no cause for concern in the credit sector. The release of the US market report for March has raised the possibility of a 0.25% increase in interest rates for the following month.
The Fourth Week of March 2023
After announcing the bankruptcy of two state banks in America and the continuing banking crisis in Credit Suisse and Deutsche Bank, the words of the US Treasury Secretary regarding the fact that the US government does not consider “general” support for deposits, made the markets more worried.
Although the extent of the crisis has not yet extended to the eastern countries, the disorder in the financial markets of the western countries has increased and some people are thinking of finding a way to escape from the dominoes of recession. Global mutual funds canceled almost $143 billion in the week ended Wednesday, the biggest increase since March 2020, and over the past four weeks, investors have turned more than $300 billion in assets into cash. Meanwhile, the data showed that the Federal Reserve Facility, which gives foreign central banks access to dollar funding, reached a record $60 billion, indicating strong foreign demand for dollars. However, the sum of these events is expected to put a lot of pressure on the price of oil, but last week the price of Brent oil increased by about 3%. Also, last week, the price of Persian Gulf fuel oil (180 and 380) increased by 0.5% and 3%, respectively, and the price of gasoline and diesel in the Persian Gulf increased by 5% and decreased by 0.5%, respectively, and last week’s data showed that US crude oil reserves were 1.1 million barrels increased. In Iran, however, the closure of the markets on Nowruz Eid did not show a clear perspective of the events. After weeks of positive political news from Iran’s agreements with Arab countries, Iran’s geopolitical problems, especially with the United States, and also the continuation of the war in Yemen, renewed optimism in the market, and it is the cause of the increase in the dollar rate in the free market. In Iranian bitumen transactions, the closing of Nowruz caused the prices to not change much. According to the opinion of the bitumen market in Iran this week, due to the new developments, it will wait for the ambiguities to be resolved. Stable and serious fluctuations in the price of bitumen are not expected.
SPECIAL REVIEW
The rise of bitumen cargoes in the middle of dark ships
Although at the end of last year, commodity and energy markets were affected by wartime and the risks of increasing military conflict, in the first quarter of 2023, most markets faced a new world, which was accompanied by a change in ship routes and a new definition of business partners. Although in the fall, with the increase of sanctions against Russia by European countries, Russian ships changed their route to India, China and even the Persian Gulf, but in the winter, with the formalization of strategic agreements between Eastern countries and also the alliance of China and Arab countries, analysts of past trade relations They put it aside. The issue of the presence of China, Russia and Saudi Arabia as the largest consumers
And oil exporters, on the one hand, can disrupt the export order of oil products produced by refineries more than oil. One of these effects can be seen in the distance of fuel oil 380 compared to Brent oil in this period. In the first three months of this year, the flow of Russian fuel oil to the ports of the Middle East and South Asia put the price of Persian Gulf fuel oil out of balance, and the drop in the price of this product was much more than the drop in the price of crude oil. Also based on the data
The energy analysis company Vortexa has doubled the volume of Russian fuel oil in Southeast Asia compared to the same period last year. On the other hand, bitumen price appeared less volatile during this period. Based on this, three hypotheses can be presented regarding the side behavior of bitumen price in the second quarter of the year:
1) The embargo of European countries on Russian crude oil and oil products, the embargo on bitumen
The title of indirect goods is excluded.
2) Moving fuel oil with dirty tankers is considered an advantage compared to the problems of moving bitumen, and Russian refineries increased the production ratio of fuel oil and diesel to bitumen, and therefore Russia’s export has decreased from 5 million tons annually (Russia is about 5 million tons annually) Exported bitumen
half of which was allocated to America’s allied countries.
3) The ability to easily store bitumen on land gives the power of ports in marketing and stabilizes the price of bitumen compared to other products.
SUMMARY OF WORLD BITUMEN NEWS
Following the protests of the French people against increasing the retirement age, all production and loadings in several refineries of this country have been stopped and affected the supply in North-West Europe, and at the same time the demand for bitumen in most parts of Europe and Africa has increased slowly. The demand in the Mediterranean markets increased due to the warmer weather. Bitumen prices in most parts of Africa remained almost constant due to the increase in construction activities in key markets such as Nigeria and South Africa, and bitumen prices in Singapore did not witness much change.
FORECASTING THE PRICE OF OIL AND OIL PRODUCTS
Last week, in addition to the disappointing news from major banks, the words of the US Secretary of Energy, who said that it will be difficult to replenish strategic oil reserves this year, and also announced signs of strong crude oil supply from Russia, contrary to the previous statements of Russian officials from There were some things that affected the price of oil, and ultimately it led to a 3% increase in the price of oil per week.
ANALYSTS LOOK AT THE MARKETS
JPMorgan Asset Management Chief Executive Officer George Gach provided a detailed assessment of his approach to global markets last Tuesday. Gech did not say that now is the time of panic. But in the same way, he felt no chance and told reporters that the asset manager
“Market Stress Protocol” has been activated. Previous activations include March 2020, when the global momentum of the Covid pandemic affected first stocks and later bonds. It also did this when Russia launched its attack on Ukraine last year. He has warned that commercial real estate is one of the major areas of risk in global markets after aggressive monetary tightening by the US central bank. “When the Fed puts the brakes on, something goes through the windshield,” George Gach, the $2.5 trillion asset manager, said at a European media briefing on Tuesday. All of these episodes have left investors and policymakers wondering, “What’s the next impact? Commercial real estate is an area of concern. We have higher interest rates for property developers and how does that affect the real estate market and lenders in that space?
Other Necessary Information About Bitumen
Bitumen, also known as asphalt or tar, is a dark, thick, and sticky substance that is widely used in road construction and waterproofing applications. It is a by-product of the refining of crude oil and is composed of various hydrocarbons. Bitumen is classified based on its viscosity and the temperature at which it can be handled. In this part, we will provide information about the different kinds of bitumen available on the global market, how it is delivered, and a short description of commercial ports.
Exploring The Global Bitumen Market: Types, Prices, And Trends
BITUMEN TYPES
Bitumen, a dark, gooey substance with a high viscosity, is produced by distilling crude oil. In order to build highways, airports, and other infrastructure, it is a crucial element. Bitumen price are affected by a number of variables, including bitumen type, supply and demand, location, and crude oil prices.
Bitumen consumption is rising as a result of an increase in infrastructure development projects worldwide. With almost 85% of the world’s bitumen use going toward road building, this industry is the largest consumer of the substance. Bitumen is also used for insulation, waterproofing, and roofing.
The world’s most popular bitumens and the variables influencing their cost will be covered in this part. We’ll also examine the bitumen market’s recent patterns and potential developments worldwide.
Oxidized Bitumen (Blown Asphalt)
Bitumen that has been exposed to air and heat and as a result has grown harder and more brittle is known as oxidized bitumen, sometimes known as blasted asphalt. The oxidized bitumen grades 85/25, 95/25, and 115/15 are the most often utilized ones.
The grade of the raw materials utilized, the level of oxidation, and the cost of transportation are only a few of the variables that affect the price of oxidized bitumen. The market’s dynamics of supply and demand, the cost of manufacturing, and the costs of substitute items are further elements that influence the pricing.
Penetration Bitumen
Road building, roofing, and waterproofing often employ penetration bitumen, a form of bitumen. The penetration bitumen grades 60/70, 80/100, and 40/50 are the most often utilized. In tenths of a millimeter at 25°C, the values show the bitumen’s penetration depth.
The cost of transportation, the refinement process, and the quality of the crude oil utilized are only a few of the variables that affect the price of penetrating bitumen. The market’s dynamics of supply and demand, the cost of manufacturing, and the costs of substitute items are further elements that influence the pricing.
Viscosity Grade Bitumen (VG Bitumen)
A form of bitumen called viscosity grade bitumen, or VG bitumen, is often used in the paving and building of roads. VG10, VG20, VG30, and VG40 are the most frequently utilized grades of VG bitumen.
The cost of transportation, the refinement process, and the quality of the crude oil utilized all affect the price of VG bitumen. The market’s dynamics of supply and demand, the cost of manufacturing, and the costs of substitute items are further elements that influence the pricing.
Cutback Bitumen
To make it simpler to handle and apply, cutback bitumen has been combined with solvents. MC30, MC70, MC250, RC30, RC70, RC250, SC70, and SC250 are the most frequently used grades of cutback bitumen.
Many elements, including the caliber of the raw materials utilized, the degree of blending, and the cost of transportation, have an impact on the price of cutback bitumen. The market’s dynamics of supply and demand, the cost of manufacturing, and the costs of substitute items are further elements that influence the pricing.
Emulsion Bitumen
Bitumen that has been diluted with water and emulsifiers to make it more pliable is known as emulsion bitumen. Emulsion bitumen types CSS1, CSS1H, CRS1, CRS2, SS1H, SS1, and RS1 are the most often utilized kinds. The types of emulsifiers used are indicated by the letters in the names.
The kind and caliber of the emulsifiers used, the degree of mixing, and the location of the maker are only a few of the variables that affect the cost of emulsion bitumen. The market’s dynamics of supply and demand, the cost of manufacturing, and the costs of substitute items are further elements that influence the pricing.
Polymer Modified Bitumen (PMB)
Bitumen that has been combined with polymer additives to improve its performance and qualities is known as polymer-modified bitumen (PMB). The most widely utilized polymers are ethylene-vinyl acetate (EVA) and styrene-butadiene-styrene (SBS) (EVA).
Since it provides better durability, flexibility, and resistance to rutting and cracking, PMB is often utilized in the building of roads. Moreover, it is used in waterproofing and roofing applications.
The kind and grade of the polymers used, the level of modification, and the cost of shipping all have an impact on the pricing of PMB. The market’s dynamics of supply and demand, the cost of manufacturing, and the costs of substitute items are further elements that influence the pricing.
Performance Grade Bitumen (PG Bitumen)
To guarantee that the bitumen used in road construction can endure the severe weather conditions and significant traffic loads, the bitumen industry has created the idea of Performance Grade Bitumen. Performance Grade Bitumen is a preferred material for constructing roads because it can tolerate a variety of temperature conditions and traffic loads.
Performance Grade Bitumen PG 64-22
Performance Grade Bitumen PG 58-28
Performance Grade Bitumen PG 76-22
Performance Grade Bitumen PG 70-10
One of the most often used Performance Grade Bitumens worldwide is PG 64-22. It is a bitumen that has been treated with polymers to endure heavy traffic volumes and harsh weather. The cost of transportation, the refinement process, and the quality of the crude oil utilized are only a few of the variables that affect the price of PG 64-22.
Another well-liked Performance Grade Bitumen that is often used in road building is PG 58-28. It’s a polymer-modified bitumen designed to endure heavy traffic loads and temperate weather. The cost of transportation, the refinery’s efficiency, and the quality of the crude oil utilized all have an impact on the price of PG 58-28.
High-performance bitumen known as PG 76-22 is designed to endure harsh climate conditions and high traffic volumes. It is a polymer-modified bitumen with better qualities than regular bitumens, making it a great option for building roads in challenging climates. The cost of transportation, the refinement process, and the quality of the crude oil utilized are only a few of the variables that affect the cost of PG 76-22.
A high-performance bitumen called PG 70-10 is designed to handle both severe traffic loads and mild weather conditions. It is a polymer-modified bitumen that is commonly utilized in road building and has great qualities. The cost of transportation, the refinement process, and the quality of the crude oil utilized are only a few of the variables that affect the price of PG 70-10.
Crumb Rubber Modified Bitumen (CRMB)
Crumb Rubber Modified Bitumen, or simply CRMB, is an innovative material derived by blending regular bitumen with crumb rubber. This mixture enhances the quality of bitumen, increasing its resistance to various factors like weather changes, heavy traffic, and more.
A COMPREHENSIVE GUIDE TO BITUMEN PRICE
Factors, Market Trends, and Regional Differences
Bitumen, a critical material in road construction and roofing, holds a price subject to various influences. This part dives into the intricacies of bitumen pricing, the factors that sway it, and its regional discrepancies.
Being a by product of the oil refining process, bitumen’s price is inherently linked to crude oil prices. Therefore, any conversation about “What is the price of bitumen?” often points back to the international oil market. For instance, shifts in the price of a barrel of oil directly impact the bitumen price in USD, affecting both global and regional markets.
Transportation costs play a significant role in determining bitumen prices. Given its high viscosity and specific handling requirements, shipping costs increase with the distance from the source. This is why the answer to “How much is a ton of bitumen?” can differ based on the purchase location. For example, the bitumen price in Iran, a major global producer, is generally lower than in Turkey due to reduced transportation costs. Similarly, the UAE bitumen price may be higher due to the extensive logistics involved in its distribution.
Tax and tariff structures also contribute to regional price variations. For instance, the price of Iran bitumen in Bangladesh could be higher than the domestic price due to import duties. Similarly, the bitumen price in India, Malaysia, or Pakistan can differ due to these countries’ unique import policies.
Demand for bitumen also influences its price, with peak construction seasons often leading to price surges. Hence, “How much is a ton of bitumen today?” can vary depending on the season, also affecting the bitumen price per kg.
Historical pricing data, such as the bitumen price history, provides valuable insights into market trends and future price movements. The bitumen price index and bitumen price chart are commonly used tools for this analysis. For instance, the bitumen price chart for 2023 shows a noticeable upward trend, indicating increased global demand.
Quality and grade of bitumen also cause price variations, often referred to as the bitumen price range. Higher-quality bitumen suited for heavy-duty roads commands a higher price than lower grades.
Staying updated with the bitumen price list today is crucial for industry stakeholders, enabling them to make informed decisions based on the current bitumen market price. Understanding the bitumen price per ton in USD can help businesses plan their expenditure and manage resources effectively.
In countries like the UAE, with high oil production, bitumen prices reflect that abundance. On the other hand, a question like “How much is bitumen in Turkey?” might yield a higher price due to Turkey’s reliance on imported bitumen. Similarly, the price of 1 barrel of bitumen can fluctuate based on global crude oil prices and regional market conditions.
In conclusion, understanding the various factors influencing bitumen prices – from crude oil prices, transportation costs, seasonal demand, to taxation and bitumen grade – is of paramount importance for industry players to navigate the market effectively and make informed decisions. Do remember that while this part provides a comprehensive overview of bitumen pricing, actual costs can vary significantly due to factors such as project-specific requirements, local market conditions, and contractual agreements. Always consult with a trusted industry expert or source before making any procurement decisions.
WHAT AFFECTS BITUMEN PRICE?
There are numerous variables that can affect bitumen price. The following are a few of the most crucial ones to think about:
Crude Oil Prices: As bitumen is a by-product of crude oil refining, any fluctuation in crude oil prices directly impacts the price of Bitumen.
Costs of production: The price of producing bitumen varies according to the extraction technique used. The cost of producing bitumen from oil sands, for instance, is higher than the cost of producing it from traditional oil wells. Bitumen price may be significantly impacted by its production costs.
Supply and Demand: The fundamental principle of supply and demand also holds for bitumen. The price of Bitumen can rise with higher demand, particularly in regions undergoing extensive road construction activities. Conversely, when the supply of Bitumen surpasses demand, prices may decrease.
Seasonality: The Bitumen price is also influenced by seasonal variations. Bitumen’s primary use is in road construction, an industry significantly affected by weather conditions. In regions with distinct seasons, the demand for bitumen usually increases during warmer months, leading to seasonal price hikes.
The availability of bitumen can also affect prices, in a similar manner. Crude oil, the main feedstock used to make bitumen, is scarce, so the supply of bitumen is largely reliant on its availability. If the supply of crude oil is disrupted, the production of bitumen may be reduced, and prices may ultimately rise.
Transportation Costs: The cost of transporting Bitumen from the refineries to the end-users also affects the final price. Longer distances and complicated transport routes can contribute to an increase in the overall cost.
Quality: Bitumen’s quality can have an impact on its cost. Bitumen comes in various varieties, each with unique characteristics like softening points, viscosities, and ductility. Generally speaking, higher quality bitumen costs more.
Political and Economic Factors: Political instability, trade policies, and the economic conditions of oil-producing countries can also sway the price of Bitumen.
A number of microeconomic factors also have an impact on bitumen price in addition to these macroeconomic factors. The quality and performance of the product, the level of customer service offered by the supplier, and the overall cost of the product are just a few of the factors that buyers of bitumen take into account when making purchasing decisions.
producing countries can also sway the price of Bitumen.
Conditions of the World Economy
The demand for bitumen, particularly in emerging economies, is significantly impacted by global economic conditions. Demand for bitumen is driven by economic expansion and the construction of new infrastructure, while demand may fall during economic downturns.
Environmental Regulations
The bitumen price can be significantly influenced by environmental regulations on its use and production. Higher production costs, which result in higher bitumen price, can be caused by factors like stricter regulations on greenhouse gas emissions and the use of fossil fuels.
Several variables, including the type of packaging used to transport and store bitumen, can cause the bitumen price to change significantly. In this section, we’ll look at how different packaging options, like jumbo bags, new still drums, and bulk, affect the bitumen price around the world.
Bitumen is commonly packaged in new still drums. Steel is used in their construction, and each one can carry a certain amount of bitumen. New still drums offer a safe and dependable means of transporting bitumen, which is one of their benefits. Additionally, they can be stacked, which allows for more compact storage and the saving of storage space. Due to the high cost of producing the drums, using new still drums may result in an increase in bitumen price. The cost of transportation in general and the weight of the drums both have the potential to raise bitumen price.
But jumbo bags are a more economical way to package bitumen. They can hold a lot of bitumen and are made of sturdy woven polypropylene. Jumbo bags can be loaded onto a truck or container without the use of special heavy lifting tools, making them simple to handle and transport. In addition to being recyclable, they are an environmentally friendly choice. Jumbo bags, which are less expensive to produce and transport than brand-new still drums, can help lower the overall cost of bitumen.
Another option for bitumen packaging is bulk. Bitumen is being moved in this instance in tanker trucks or containers. Because it doesn’t require any additional packaging, bulk transportation is the most economical way to transport bitumen. The cost per unit can be further decreased by allowing for the transportation of larger volumes of bitumen via bulk transportation. However, the need for specialized infrastructure and equipment limits the availability of bulk transportation in some areas.
Bitumen price can be significantly influenced by the type of packaging used. Although new still drums offer a safe and dependable method of moving bitumen, their production costs and weight can drive up the price. The overall cost of bitumen can be reduced by using jumbo bags, which are a cost-effective alternative. The most economical way to transport bitumen is in bulk, but it needs specialized infrastructure and equipment.
As a result, bitumen price can be significantly impacted by the packaging used. The cost of bitumen can rise overall even though new still drums provide a safe and dependable alternative. While bulk transportation is the most economical option but calls for specialized infrastructure, jumbo bags are a cost-effective alternative that can lower the price of bitumen. Because of this, when pricing bitumen for construction projects, it is crucial to carefully consider the packaging options.
Keeping Abreast with Bitumen price
Considering the volatility of Bitumen price, it’s crucial for stakeholders, including suppliers, contractors, and construction firms, to stay updated with the latest market trends. Understanding the dynamics of bitumen pricing aids in making informed purchasing decisions, effective budget planning, and competitive pricing strategies.
While the factors discussed above significantly impact the Bitumen price, they are not the only ones. Therefore, a thorough understanding of the bitumen market is necessary for anyone involved in industries that depend on this vital material.
IRAN BITUMEN PRICE: A DETAILED DISSECTION OF MARKET DYNAMICS
In the realm of construction and infrastructure development, Bitumen holds a vital place. Bitumen, due to its top-tier binding capability, robust resistance to deformation, and remarkable durability, is the go-to material for numerous industries. This part aims to offer a comprehensive analysis of Iran Bitumen price and shed light on the influences steering its fluctuations.
Bitumen: The Preferred Industrial Choice
Bitumen, due to its unique attributes, enjoys significant demand in the global market. It is especially favored for road construction and other heavy-duty applications that require a high level of strength and longevity. The demand and supply dynamics of this product play a significant role in shaping the Bitumen price in Iran and across the globe.
Iran: A Global Bitumen Powerhouse
Positioned favorably with vast oil reserves and advanced refining capacities, Iran is a key player in the global bitumen market. It exports high-quality Bitumen to various countries, making the Iran Bitumen price a matter of global interest.
Key Influencers of Iran Bitumen price
Several factors come into play when determining the Bitumen price in Iran:
- Crude Oil Prices: Bitumen is a derivative of crude oil, making its price directly influenced by the fluctuations in crude oil prices.
- Demand and Supply Mechanics: The balance between demand and supply also plays a vital role. An increase in demand with a constrained supply can push the prices upward, and the opposite can lead to a decrease in prices.
- Seasonal Variations: The demand for Bitumen is subject to seasonal variations. With construction activities generally picking up in the warmer months, the demand for Bitumen rises, affecting its price.
- Political and Economic Landscape: The political and economic climate, both domestic and international, can impact the Iran Bitumen price. Factors like economic sanctions, trade policies, and diplomatic relations can all play a part.
Market Dynamics: Navigating the Bitumen Industry
Understanding the Iran Bitumen price is key to navigating the complex landscape of the bitumen industry. However, it’s not just about understanding the present; one must also look forward to future trends and developments, such as technological advancements in bitumen production and the emergence of sustainable alternatives.
To Summarize
Bitumen is a significant player in the construction industry, particularly in the development of infrastructure projects. Grasping the factors influencing bitumen prices and locating the best bitumen suppliers are crucial aspects to navigate this market. This part serves as a guide to understand bitumen price dynamics and locate reliable sources for quality bitumen.
1. Bitumen Price Influences:
1.1. Bitumen Price and Market Demand: Bitumen price is profoundly influenced by the balance of supply and demand. Factors such as production levels, storage capacity, and infrastructure projects across the globe contribute to these dynamics.
1.2. Bitumen Price and Crude Oil: Bitumen is a derivative of crude oil. Therefore, bitumen price is directly impacted by fluctuations in oil prices, which in turn influence production costs and the final bitumen market price.
1.3. Bitumen Price and International Trade: Import and export regulations, trade agreements, and tariffs imposed by governments can influence bitumen prices. Such factors determine the cost of transporting bitumen, affecting the bitumen price list in different markets.
2. Bitumen Price List Considerations:
2.1. Bitumen Grade and Specifications: Different applications require different grades of bitumen, leading to varying bitumen price lists. The grade and specifications required for the bitumen affect the bitumen market price.
2.2. Additives and Modifiers: Bitumen products enhanced with additives or modifiers for improved performance characteristics can command a different bitumen price.
2.3. Quality Certifications: Bitumen products that meet internationally recognized quality standards can command higher prices due to their superior performance and durability.
3. Identifying Bitumen Sellers, Suppliers, and Manufacturers:
3.1. Bitumen Sellers and Manufacturers in Iran: Bitumen sellers in Iran, like Petro Naft and other reputable suppliers, offer competitive pricing and consistent product quality. Including them and us in your list of bitumen suppliers can provide a broader range of options.
3.2. Global Bitumen Suppliers: Established global suppliers with a strong track record of providing quality bitumen products should also be included in your list of nearby bitumen manufacturers and suppliers.
3.3. Online Platforms and Directories: These platforms connect buyers with verified bitumen suppliers and manufacturers, allowing the buyers to compare bitumen price lists, product specifications, and customer reviews.
4. Where to Buy Bitumen:
4.1. Contacting Suppliers: Once you’ve identified potential suppliers, initiate contact through their available communication channels. You can reach out to Petro Naft and other bitumen suppliers in Iran, or the nearby bitumen manufacturer of your choice, to inquire about the bitumen price in Iran or other regions.
4.2. Buy Bitumen: After your research, you can purchase bitumen from the supplier that best meets your needs. Request a detailed quotation, including product specifications, bitumen price, delivery terms, and payment options.
4.3. Evaluating Additional Services: Consider the additional services offered by suppliers. These services can contribute to a smooth procurement process and overall customer satisfaction.
Conclusion:
Awareness of factors influencing bitumen price and knowing where to buy bitumen are key for buyers in this market. By understanding market dynamics, quality considerations, and identifying reliable bitumen suppliers, buyers can make informed decisions to purchase bitumen.
MARKET TRENDS AND FORECAST FOR BITUMEN PRICES
Due to a variety of variables, including supply-demand dynamics, fluctuating crude oil prices, geopolitical tensions, and shifting laws, the bitumen market has been unstable recently. The worldwide bitumen market was estimated to be worth $71.4 billion in 2019 and is anticipated to reach $90.4 billion by 2027, increasing at a CAGR of 3.1% from 2020 to 2027, according to a research by Research and Markets.
The increasing need for infrastructure development, especially in emerging nations, is one of the main drivers influencing bitumen demand. Large amounts of bitumen are needed for the building of roads, motorways, bridges, and other infrastructure projects. Bitumen is also extensively used in the waterproofing and roofing sectors.
The market is anticipated to rebound in the ensuing years as the need for infrastructure projects grows on a worldwide scale. Future demand for bitumen is also anticipated to be driven by the development of innovative technologies like warm-mix asphalt and polymer-modified bitumen.
Conclusion
Bitumen is an essential component of infrastructure construction and waterproofing solutions. Oxidized bitumen, penetration bitumen, viscosity grade bitumen, cutback bitumen, emulsion bitumen, and polymer-modified bitumen are among the bitumen varieties that are most often utilized. The cost of transportation, the dynamics of supply and demand, the price of substitute goods, and the quality of the raw materials all have an impact on the cost of bitumen.
Global Bitumen Market: Long-Term Outlook and Regional Trends
The bitumen market is anticipated to expand in the future as demand for infrastructure projects develops worldwide. The bitumen market has a good long-term outlook, notwithstanding potential short-term volatility brought on by changes in crude oil prices and geopolitical unrest.
The state of the bitumen market varies greatly across nations and regions, depending on things like infrastructural development, the state of the economy, and political stability. Although other areas like Africa and America have sizable bitumen markets, Asia and the Middle East are the main producers and consumers of bitumen. In the next years, the bitumen sector is anticipated to keep expanding because to the rising need for infrastructure construction. The sector is anticipated to develop as new technology and environmentally friendly practices become available, with an emphasis on lowering environmental impact and enhancing infrastructure quality.
Because of a number of variables, including supply and demand, production costs, and governmental policy, bitumen price vary widely throughout nations and areas of the globe. In this section, we’ll look at how bitumen prices are currently doing throughout the globe in different parts of the world.
Asia and the Middle East’s Position on the Bitumen Market
The world’s greatest producer and user of bitumen is the Asia-Middle East area. Major participants in the bitumen industry include nations like Iran, India, Singapore, South Korea, Iraq, and the United Arab Emirates. The cost of production, the price of crude oil, and government regulations all have an impact on bitumen pricing in this area. For instance, the US sanctions have caused Iran, the world’s biggest producer of bitumen, to see a fall in bitumen exports.
The price of bitumen has been varying in India as a result of adjustments made to the tax structure of the nation. Due to Singapore’s important position and its function as a trading center for the Asian bitumen market, prices there have remained mostly steady. While being a major producer of bitumen, South Korea also imports the substance to fulfill local demand.
The majority of the world’s bitumen is produced and consumed in the Asia and Middle East area, which holds 85% of the market. The rapid urbanization and industrialization of nations like China, India, Iran, and Singapore is blamed for the region’s supremacy.
Iran is the biggest exporter of bitumen in the world, with an annual production capacity of over 4 million metric tons. Iran sells goods to regions of Europe, Asia, and Africa, and its bitumen sector has a large impact on the nation’s economy. India, on the other hand, consumes more bitumen than any other country, at a pace of nearly 6 million metric tons annually. India’s expanding road infrastructure development is predicted to fuel a 6.5% yearly growth in the country’s bitumen industry.
The building of highways, airports, and other infrastructure developments in South Korea are what generate the need for bitumen. The nation also exports a substantial amount of bitumen, with China being its principal buyer. A well-established bitumen market exists in Singapore as a significant commercial center, with imports coming from the Middle East and exports going to other Southeast Asian nations.
The greatest bitumen deposits in the Middle East are in Iraq, which also has a 3.5 million metric ton annual production capability. Because of the government’s emphasis on infrastructural development, the bitumen sector in the nation has seen tremendous growth in recent years. Bitumen is also widely produced and used in Saudi Arabia and the United Arab Emirates (UAE), both of which have made considerable investments in infrastructure.
African Bitumen Market Situation
The demand for bitumen in Africa is rising, with the biggest customers being Nigeria, South Africa, and Egypt. The price of importing bitumen from other nations, such Europe and the Middle East, has an impact on bitumen pricing in Africa. In addition, the expanding number of road development projects in Africa is driving up demand for bitumen.
Bitumen is expensive in Nigeria as a result of the high cost of importing the material. Due to the country’s low capability for production, imports are the main source of bitumen for the majority of its demands. The cost of importing bitumen and the country’s changing exchange rate both have an impact on bitumen pricing in South Africa. In contrast, Egypt has a sizable refining capability and produces the majority of its bitumen locally, which leads to very steady pricing.
The bitumen market in Africa is still relatively small but expanding, with annual consumption at around 2.5 million metric tons. Road building, which is a large area of infrastructure development in the region, is what mainly drives the need for bitumen.
Egypt is the biggest user and producer of bitumen in North Africa, with an annual production capacity of over 1.2 million metric tons. The Middle East and other African nations both get exports from this nation. Nigeria’s bitumen market is expanding in West Africa as a result of the nation’s emphasis on infrastructure improvement and the building of new roads. With an annual consumption rate of over 1 million metric tons, South Africa is the biggest bitumen market in Southern Africa. Road building and maintenance are the driving forces behind the nation’s bitumen sector.
American Bitumen Market Situation
Because of the development of roads, airports, and other infrastructure developments, America has a sizable bitumen market. Canada, the US, and Mexico generate the most bitumen in the area.
The third-largest bitumen deposits in the world are in Canada, which also has an annual production capacity of around 2.7 million metric tons. The nation exports goods to the United States and other nations, with the United States receiving the lion’s share of such goods. The United States consumes over 5 million metric tons of bitumen annually, making it the second-largest user of the substance. Road building, particularly in places like California and Texas, is the main driver of the nation’s bitumen sector. The development of roads, airports, and other infrastructure developments in Mexico is what drives the bitumen industry.
North America
Bitumen is produced and used in large quantities throughout North America, with the United States and Canada playing a prominent role in the market. The cost of production, the price of crude oil, and governmental regulations all have an impact on bitumen pricing in North America. The bitumen market in the area is very competitive, with several suppliers and companies fighting for market share.
The capacity for production and the price of transportation in the United States both have an impact on bitumen pricing. The majority of the bitumen used in the nation is produced there, but to fulfill demand, the substance is also imported. The price of production and transportation has an impact on bitumen pricing in Canada. Oil sands, an important source of bitumen, are abundant throughout the nation.
South America
Brazil, Mexico, and Venezuela are among the key participants in the South American bitumen market, which is expanding. A number of factors, such as the price of crude oil, the cost of production, and governmental regulations, have an impact on bitumen pricing in South America. The bitumen market in the area is very competitive, with several suppliers and companies fighting for market share.
The country’s need for bitumen, which is fueled by an increase in road building projects, has an impact on bitumen pricing in Brazil. Since that Mexico is a net importer of bitumen, the cost of production and transportation has an impact on bitumen pricing in that nation. Despite having substantial crude oil reserves, Venezuela’s political and economic circumstances has caused a drop in the country’s production capacity, which has resulted to highly unpredictable bitumen price.
Status of the European Bitumen Market
Bitumen is produced in substantial quantities throughout Europe, where nations like Italy, Spain, Greece, and the Netherlands are key participants in the industry. The price of crude oil, the cost of production, and the level of demand all have an impact on bitumen pricing in Europe. The bitumen market in the area is very competitive, with several suppliers and companies fighting for market share.
The cost of importing the commodity has an impact on bitumen price in Spain, whereas the high tax rates in Italy have an impact on pricing. Bitumen prices in Greece are influenced by the cost of transportation as well as the country’s economic status. The Netherlands’ Rotterdam seaport serves as an important center for the distribution of bitumen across Europe, with local dynamics of supply and demand having an impact on bitumen pricing.
As a result of the development of highways, airports, and other infrastructure projects, Europe has a well-established bitumen market. Russia, Italy, Spain, and Greece manufacture the most bitumen in the area.
Russia is the second-largest producer of bitumen in the world, with an annual production capacity of over 4 million metric tons. Poland and Germany are the nation’s top export destinations, although it also sells to nations in Asia and Europe. Although having smaller bitumen markets, Italy, Spain, and Greece are key producers and consumers of bitumen. Road building and upkeep in these nations is what drives the bitumen sector.
There is a sizable bitumen trading center in Rotterdam, the Netherlands, where businesses from all over the globe trade bitumen. The port is well-positioned and acts as a bridge between Europe and other continents. The port is one of the biggest bitumen trade centers in the world, handling over 8 million metric tons of bitumen annually.
Bitumen Market Situation in Other Regions
With nations like Latvia, Lithuania, and Estonia being significant market participants, the Baltic area is a burgeoning market for bitumen. The cost of delivering the product and the level of demand for the commodity are only two of the many variables that affect bitumen pricing in this area. The bitumen market in the area is very competitive, with several suppliers and companies fighting for market share.
The location of Latvia and the price of importing bitumen both have an impact on bitumen pricing there. Although being a major producer of bitumen, Lithuania also imports the substance to fulfill local demand. Bitumen is a product that Estonia net imports, and as a result, the cost of transportation and the country’s economic state both have an impact on bitumen pricing.
There are several additional areas with sizable bitumen markets in addition to the ones already listed. Taiwan, Thailand, Bahrain, Kazakhstan, Indonesia, and Venezuela are a few of them.
Highway and other infrastructure developments in Taiwan are what fuel the bitumen industry. The nation sells bitumen to other Asian nations and imports it from the Middle East. The development of roads and airports in Thailand is the primary driver of the bitumen business. In recent years, the bitumen sector in the nation has expanded dramatically as a result of major government investment in infrastructural growth.
While being tiny, Bahrain’s bitumen industry is expanding because to the development of roads and other infrastructure projects. With the government investing in infrastructural development, the bitumen business in the nation is anticipated to expand dramatically over the next several years.
Kazakhstan’s emphasis on infrastructure improvement and the building of new motorways has resulted in a burgeoning bitumen market. The bitumen sector in the nation has expanded dramatically in recent years, and it can now produce 2 million metric tons of bitumen annually.
The development of motorways and other infrastructure projects in Indonesia is what drives the bitumen industry. The bitumen sector in the nation has expanded dramatically in recent years, and it can now produce around 2.5 million metric tons of bitumen annually.
With one of the greatest bitumen deposits in the world and an annual production capability of over 3.5 million metric tons, Venezuela is a major producer of this substance. Political and economic unrest have recently had a severe effect on the nation’s bitumen business, but the government is striving to resurrect the sector.
Conclusion
In conclusion, bitumen price fluctuates widely around the globe based on a number of variables including supply and demand, production costs, and governmental regulations. Asia and the Middle East are the world’s top producers and consumers of bitumen, with Iran, India, Singapore, South Korea, Iraq, and the United Arab Emirates among its key participants. Many nations compete for market share in Europe and North America, which are both major producers and consumers of bitumen. The demand for bitumen is rising because to the rising number of road building projects, and the markets in Africa, South America, and Asia-Pacific are expanding.
Global Bitumen Transportation and Delivery Terms
Bitumen transportation from production centers to end users has grown in importance as a consequence of the rise in bitumen demand on a worldwide scale in recent years. The many bitumen delivery terms used across the globe, such as FOB, CFR, and CPT, will be covered in this section.
FOB (Free on Board)
The bitumen business often uses the delivery word “FOB.” It is a phrase used in international commerce to describe how a supplier delivers items to a customer at a designated port of shipment. The customer is responsible for paying the shipping costs, insurance, and unloading the goods at the destination port under the FOB delivery term. The supplier is responsible for loading the products aboard the vessel.
For the export of bitumen from the producing countries to the customer, the phrase “FOB delivery” is used in the bitumen sector. A customer in Europe, for instance, may purchase bitumen from a Middle Eastern supplier FOB at the port of loading. The expense of transportation, insurance, and unloading the bitumen at the final port would then be the buyer’s responsibility.
CFR (Cost and Freight)
In the bitumen sector, CFR is another extensively used delivery word. It is a phrase used in international commerce to define how a supplier delivers products to a customer at a certain port of delivery. The cost of shipping and insurance for the products are the supplier’s responsibilities under the CFR delivery term, and the buyer is in charge of unloading the items at the destination port.
The export of bitumen from the producing countries to the customer is referred to as a CFR delivery in the bitumen sector. A supplier of bitumen in the Middle East, for instance, may offer the product CFR to a customer in Europe. The customer would be in charge of unloading the bitumen at the destination port, while the supplier would be in charge of paying the transportation costs and insurance for the bitumen.
CPT (Carriage Paid To)
The delivery term CPT is used to indicate when a provider delivers items to a customer at a specified location. In accordance with the CPT delivery term, the supplier is in charge of paying for the items’ shipping and insurance up until they arrive at the specified location. The unloading of the items at the destination is the buyer’s responsibility.
The transportation of bitumen from the supplier to the customer inside the same nation is referred to as CPT delivery in the bitumen sector. A supplier of bitumen in the US, for instance, may sell CPT to a customer in another state. The bitumen’s transportation costs and insurance up until it reaches the specified location of destination would be the responsibility of the supplier, and its unloading would be the responsibility of the customer.
Conclusion
In conclusion, the bitumen business strongly depends on the movement of the product from the nation of production to the ultimate customer. The delivery words FOB, CFR, and CPT are often used in the business to define the conditions of shipping. Each delivery term has benefits and drawbacks, and the choice of delivery term that best meets the interests of the customer and the supplier is up to them. Buyers and suppliers may bargain for the best terms for their bitumen transportation requirements by being aware of the various delivery terms.
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Bitumen Business in Commercial Ports
By the transit of products, including bitumen, commercial ports serve as crucial hubs of international commerce, connecting nations and markets. In order to make asphalt for roads, airports, and other infrastructure projects, bitumen, a critical component of the construction industry, is utilized. The many commercial ports throughout the globe and their importance to the bitumen industry will be examined in this essay. We will also talk about the issues these ports confront, how they contribute to global commerce, and the technologies and ideas that have improved them.
Crude oil is used to make bitumen, a dark, thick, and sticky material that is shipped in enormous amounts between nations. The transportation of bitumen from the site of production to the end location is significantly influenced by commercial ports in the bitumen industry. Bitumen and other items enter and leave the world’s markets via commercial ports, which link several nations and marketplaces.
Since they provide a practical and effective route to transport the product from the site of production to the end destination, commercial ports are crucial in the bitumen industry. The ports provide loading and unloading services, storage facilities, and transportation infrastructure including trains, roadways, and waterways. To help firms manage their logistics, they also provide a variety of support services including customs clearance, freight handling, and paperwork.
Purchasing Various Types of Bitumen from Petronaft
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Diverse Types of Bitumen (Asphalt)
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Hello, Sir /Madam
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