SINGAPORE (ICIS)--Bitumen prices in east China may extend gains in the coming weeks, as construction of road projects across the country is gaining momentum, industry sources said on Friday.
On 11 September, heavy traffic bitumen was traded at CNY4,600-4,650/tonne ($751-760/tonne), up by CNY50/tonne from end-August, according to C1 Energy, an ICIS service in China.
Bitumen is used in paving roads.
Most refiners are generating strong bitumen sales, leading to declines in stock levels that could precipitate further hikes in offers, traders said.
Bitumen stocks of most refineries in east China are now down to 30% of their storage capacity, from around 40-50% in early August, industry sources said.
Producers such as China Offshore Oil & Gas (Taizhou) and China Offshore Bitumen (Taizhou), have hiked prices twice by CNY50/tonne this month, while WenZhou PetroChina Fuel Chemical raised its bitumen prices once by the same amount, traders said.
Other major producers, like Alpha (Jiangyin) Bitumen and Jiangsu PetroChina Xingneng Asphalt, are mulling increasing prices mid-month and are cutting production to justify higher price quotes, they said.
“They [producers] are cutting production so as to reduce supply, paving way for the proposed price increase,” said one trader.
Bitumen production at Alpha (Jiangyun) Bitumen is projected to fall to 50,000 tonnes this month from 70,000 tonnes in August, while Jiangsu PetroChina Xingneng Asphalt is expected to churn out 39,000 tonnes output in September from 47,000 tonnes in the previous month, industry sources said.
($1 = CNY6.12)
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