05 February 2013 07:50 [Source: ICIS news]
SINGAPORE (ICIS)--China’s bitumen prices have been increasing since early February because of tight supply and firm feedstock costs, industry sources said on Tuesday.
Heavy-duty pave bitumen was traded at yuan (CNY) 4,800-4,850/tonne ($769-777/tonne) EXW (ex-works) in east China on 5 February, CNY100-150/tonne higher than that in late January, traders said.
The prices are expected to go up further and breach the all-time high of CNY5,150/tonne after the Chinese Lunar New Year holiday on 9-15 February, they added.
Major producers attributed the recent price rises to spikes of crude values. Brent prices increased to about $116/bbl on 4 February from $101/bbl in mid-December.
Northeast and Shandong-based refiners could sell most of their bitumen to the coking feedstock sector. Meanwhile, east and south China-based refiners saw robust demand from speculative traders and from road projects which are at the final construction phase, according to market sources.
Speculative traders are active in building up their stocks to get prepared for the upcoming peak construction season in April, the sources said.
Some traders and producers warned that prices may collapse earlier than expected as the increment was too fast and large at this stage.
The markups by some refiners in January already reached CNY200/tonne, which is far greater than those in the same period over the past four years, a major producer said.
Most traders said they would continue buying despite the price hikes. However, if prices go up further after the holiday, they may delay their purchasing plans in view of squeezed margins.
($1 = CNY6.24)
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