09 April 2012 06:24 [Source: ICIS news]
By Psyche Gong
SINGAPORE (ICIS)--A new bitumen downstream market - feedstock for coking - is fast emerging in ?xml:namespace>
“It may become a stable downstream market for bitumen,” a bitumen trader said.
Bitumen is typically used by end-users to pave highways but it is also used for producing coke in
A strong demand for oil products in the market will translate into strong demand for coking feedstock and in turn, bitumen, market sources said.
Many bitumen refineries in
On 8 April March, the coking feedstock price in
“We would not switch back to bitumen production, unless it can fetch the same price as coking feedstock,” said a
This trend of using bitumen to produce coking feedstock has become increasingly popular in
However, this trend will only continue if the margin spread between coking feedstock and other downstream markets of bitumen remains large, market players said.
In February, there was only one major refiner that supplied bitumen spot cargoes in
In the first two months of 2012, over 15% of
However, some bitumen producers in March reverted back to selling their bitumen output in the spot market as the demand for coking feedstock fell, said market sources.
The strong demand from the coking feedstock market has decreased bitumen supply to other end-users of bitumen, even though the domestic supply of bitumen remains stable.
Domestic refiners supplied about 1.03m tonnes of bitumen per month to end-users such as road project owners in January-February 2012, a fall of 14.2% year on year, according to C1 Energy.
The supply was further tightened as
The tight bitumen supply and further demand created by
Since the beginning of 2012,
The deal prices of domestic bitumen were CNY4,943-5,083/tonne latest prices on 6 April, up by CNY595/tonne or 13.3% from early January, according to data from C1 Energy.
($1 = CNY6.31)Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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