Bitumen output in north China hits three-year high in September

12 September 2012 11:12  [Source: ICIS news]

SINGAPORE (ICIS)--The output of bitumen output in north China is expected to reach a total of 722,000 tonnes in September, making it a three-year high, industry sources said on Wednesday.

The high production level is largely driven by strong demand, as contractors rush to complete their road projects in the autumn season between August and early October when weather conditions are suitable for paving bitumen, they said.

In north China, cold weather begins as early as in October and the construction of roads will be affected.

The September output in northeast China is estimated at 359,000 tonnes, a 11% increase from the previous month’s output. Prices remain firm in the market.

Production output has increased because of higher demand from companies constructing roads in Inner Mongolia and throughout north China.

Demand from the coking feedstock sector and the bunker fuel oil blending sector remains strong, with up to 30% of north China’s output delivered to both markets in August.

Production output will rise in northwest China as well, because local major refiner Karamay Petrochemical has completed maintenance for its 1m tonne/year bitumen plant in Xinjiang province in early September. The subsidiary of PetroChina plans to raise its September output from the plant by 20% month on month to 90,000 tonnes.

Demand for bitumen from the coking feedstock and the bunker fuel oil blending sectors is expected to remain high in September.

However, demand from the coking feedstock sector is likely to weaken after September, as domestic ‘teapot’ refiners may cut their coking plant operating rates in view of slowing demand from gasoil end-users.

The term ‘teapot’ refers to China's small independent refineries which become swing players in China's refined oil market when supply is tight.

September bitumen production estimates in north China (tonnes)

 

Region

Production plan for September

August output

MoM

northeast China

359,000

310,000

16%

northwest China

200,000

188,000

6%

north China

163,000

152,000

7%

Total

722,000

650,000

11%

Source: ICIS C1 Energy


By: Jessie Yang



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