By: ICN Bureau
Last updated : March 17, 2022 1:56 pm
Infinity Galaxy, the international bitumen supplier, has published a review on bitumen price in India
India decreased its bitumen price in January contrary to the global market trends. This bitumen price reduction forced the market to accept heavy bitumen price increases in February. Generally, the market had a bearish trend in January while it became bullish in February.
Infinity Galaxy, the international bitumen supplier, has published a review on bitumen price in India in the first two months of 2022.
Several reasons caused the bitumen price fluctuation in India in January and February 2022 including the issues between customs and shipping lines, crude oil price and international political tensions such as Ukraine war.
On 4th January since the competition between Middle East refineries were in the range 2-28%, the vacuum bottom price rose by about 10% leading to an increase in imported bitumen prices in India.
At this moment, East Asian and Indian importers believed that local purchases were more cost-effective for them, but limited domestic production led to rising prices since the market demand was also high. Indian importers did not expect any change in Indian IOCL prices on January 16, and so it was.
In the last week of January, with the possibility of a military conflict between Russia and Ukraine and due to the lack of a final decision by OPEC to increase oil production, the price of crude oil reached about $89.
Also, competition to buy vacuum bottoms in the Middle East was about 14 to 34%, and conditions showed that due to the cold wave in North India, rising crude oil price and the lack of supply of vacuum bottoms affected the price of bitumen.
In the first week of February, crude oil remained stable at around $90 and OPEC decided to increase their daily crude oil supply by 400,000 barrels from March 2022.
Indian refineries increased bitumen and furnace oil by approximately 2924 INR and 4463 INR respectively, after two repeated declines in January. However, most analysts believe that the upward trend in the Indian market will continue at least until mid-March 2022.
Various international crises in the second week of February affected the bitumen market. The crisis in Ukraine and the possibility of a Russian military strike kept oil prices in the $90 channel stable, sometimes reaching as high as $95 in a matter of hours.
Bitumen price imbalances between India and world prices led to a jump in bitumen price in India. It was expected that on February 15, 2022, India would increase the price of bitumen by between 3,000 to 3,500 INR. On February 15, Indian refineries raised bitumen prices by 4845 INR while the Middle East bitumen price was in the range 495 to 505 USD with an increase of 25 USD.
As a result of the Indian customs issue, it was expected that the increase in price would occur initially due to the shortage of bitumen in India in the last week of February.
Till now, in the first week of March, the issue of Indian customs has not been resolved yet, but it does not seem to be as critical as in previous days, and importers are looking for different solutions to clear their shipments. Generally, the price of bitumen rose $30 in March in India.
It seems that the growth of rates from the beginning of 2022 will not affect the level of market demand as much. Some ports are still filled with the old shipments and importers have not accepted the crude oil price above $100. Generally, due to the oil price soaring, the reality is that they have to accept new prices.