12 August 2013 09:11 [Source: ICIS news]
SINGAPORE (ICIS)--China’s suppliers of imported bitumen have cut their contract prices for August by as much as $40/tonne (€30/tonne), taking into account recent declines in spot values of the material, industry sources said on Monday.
August term cargoes are now priced at an average of $580-590/tonne, while spot prices are at $595-600/tonne, down from $600-605/tonne two weeks ago because of oversupply and weak demand, they said.
Major buyers had bought their second-quarter term cargoes at $630/tonne CFR (cost and freight) China.
A major east Asian refiner cut its prices for long-term cargoes for loading in August to $590/tonne from $630/tonne previously, market sources said.
China is a net importer of bitumen, taking in an annual volume of 2.75m tonnes. It produced 18.57m tonnes of bitumen last year, industry sources said.
Most term buyers in China directly supply the bitumen to road projects.
Meanwhile, another Asian refiner had cut its CFR east China prices for August term cargoes to below $580/tonne for a few big buyers, from $590-595/tonne previously, according to Chinese importers.
The refiner’s CFR east China prices of term cargoes averaged $630/tonne in the first half of 2013 and its CFR Shandong prices averaged $622/tonne, a South Korean trader said.
A Southeast Asian refiner, on the other hand, set the CFR south China prices for August term cargoes at about $650/tonne.
Using the CFR price of $585/tonne for calculation, the after-tax import cost of the cargoes was at yuan (CNY) 4,500/tonne, which was already lower than domestic bitumen prices.
Imported bitumen is usually sold in China $100-150/tonne higher than domestic material, industry sources said.
($1 = €0.75 / $1 = CNY6.12)
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