Business Wire IndiaAs an active bitumen supplier in Indian market, Infinity Galaxy has reported an analysis of IOCL Bitumen prices in the first six months of 2021.
According to IOCL, the difference between the maximum IOCL bitumen price of 41210 INR and the minimum IOCL bitumen price of 35950 INR was more than 5200 Rupees (about $69). Infinity Galaxy analyzed the influencing factors which determine this price gap as follows:
Oil and bitumen prices soared due to vaccination in India from January to March and then remained stable. However, the number of Coronavirus cases increased in the third week of March because of the Holi festival, which showed its effect on the next month’s bitumen price.
As a result of nationwide lockdown in April, oil demand shifted lower, consequently resulted in dropped oil prices.
Although the bitumen price was anticipated to rise this month because of the high load of construction activities prior to monsoon, it did not happen because of the Coronavirus breakdown. Every year when the monsoon arrives in India, road development slows down, and demand for bitumen falls, resulting in lower bitumen prices.
Bitumen prices remained stable the following month in May, but oil prices increased by about $4. In fact, the price of bitumen should have increased by the same amount, but this did not occur due to OPEC decisions.
Following the OPEC Plus talks on April 1st, the two sides agreed to gradually increase oil production by July. They decided that 350,000 barrels per day will be added in May and June, and 400,000 barrels per day in July. It was decided that by summer 2021, oil production would increase by 1.1 million barrels per day. However, in the second week of May, this decision was changed.
In conclusion, the Covid-19 reduced the demand for oil and lower oil prices.
Despite increased vaccination, fewer lockdowns, and growing oil prices, bitumen prices fell in June due to ready cargoes in Mundra and Nhava Sheva Ports, labor shortage, and logistics challenges in India. Another reason for the drop in bitumen prices is that Indian refineries tend to maintain their market share. In case of large volume imports, they will be unable to sell their products and will be shut down consequently.
As soon as the oil prices breached the USD 75-per-barrel on 16th July, Indian refineries increased the bitumen price by Rupee 390.
Following OPEC's decision on raising the oil output in early August and oil market fluctuations, the demand for the bitumen was decreased for a short time.
However, the IOCL bitumen was set to go up in price by Rupee 940 on 1st of August. The decision was made by Indian refineries following the oil price stabilization and rising hope for a fruitful year for the bitumen industry.
In the link below, one can see the IOCL bitumen prices from the first month of 2021:
Prediction of bitumen price in the second half of 2021
After covid-19, governments gave out massive amounts of aid in the form of loans in different countries to businesses, causing global inflation in essential commodities like steel and crude oil, which pushed up the prices of petrochemical products, including bitumen. As oil prices are likely to get higher, the price of bitumen will increase consequently. This trend is set to continue for the second half of 2021.
Working in the bitumen industry, Identifying the most recent market trends and drivers can help to find the right path.
Each week, Infinity Galaxy analyzes and reviews market prices and bitumen market trends. If interested in these weekly analyses, one can visit this website: www.infinitygalaxy.org, or can keep in touch with the Infinity Galaxy’s analysis team by firstname.lastname@example.org.
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