The Asian market for bitumen is estimated at 35-40m tonnes.
China’s demand accounts for 20m tonne and the balance is traded throughout the region.
Most regional players buy as locally as possible, and arbitrage is rare. This is because shipping costs can make long distance trade uneconomic.
From a supply perspective, bitumen is sensitive to crude/fuel oil prices. Bitumen is the last component left in a barrel of refined oil, and many refineries have fuel oil/bitumen swing capabilities.
The demand side for bitumen is driven by budgets for large public works such as road building and construction.
Overall, Asia is largely balanced. In North East Asia, China has domestic capacity and imports mainly from South Korea, Thailand and Singapore.
In Southeast Asia, Indonesia and Vietnam mainly import from Singapore, Thailand and Taiwan.
Over the medium term, demand is likely to increase in most Asian countries, with China, India and Indonesia likely to see the greatest growth.