India's Bitumen Market: Resilient Demand Amid Currency Pressures

Key Highlights

1. Price Overview: VG40: ₹38,559.32/MT (Mangalore, bulk) to ₹53,030/MT (Mumbai, bulk).
2. Demand-Supply Dynamics: Crude oil prices driven by a cold wave and China’s demand surge are boosting bitumen production and impacting supply.
3. Global Market Trends: Upcoming Trump administration policies could significantly reshape the energy market landscape.
4. Geopolitical Influence: Political instability and conflicts (Middle East, Russia-Ukraine) are fueling market uncertainty.

Bitumen Prices Surge Amid Crude Oil Uptick

• Bitumen prices for VG40 grades range from ₹38,559.32/MT (Mangalore, bulk) to ₹53,030/MT (Mumbai, bulk), with drum packaging slightly higher, starting at ₹39,200/MT (Kandla). 
• VG30 grades are priced between ₹38,559.32/MT (Mangalore, bulk) and ₹49,550/MT (Mumbai, bulk), with drum prices at ₹38,300/MT for Mundra and Kandla. 
• Bitumen emulsion prices for SS 1 grade vary from ₹33,400/MT (Pithampur, bulk) to ₹38,810/MT (Mathura, drum), while RS 1 grade ranges between ₹31,900/MT (Pithampur, bulk) and ₹38,810/MT (Mathura, drum). 

Impact of Seasonal Demand on Bitumen Supply

• Brent crude oil prices surpassed $75 per barrel due to increased heating demand driven by a cold wave in the Northern Hemisphere and rising energy demand from China.
• This reflects higher crude oil consumption, which directly impacts bitumen production and supply availability.
• In Singapore, 180 CST closed at $455, with bitumen prices in Singapore and South Korea observed at $415 and $400, respectively.

Indian Bitumen Trends: Price Corrections and Supply Insights

• In India, the slight increase in bitumen prices at the beginning of 2025 is expected to correct by $3 to $6 due to the rupee’s weakening against the dollar. However, India’s overall purchasing trends are forecasted to improve in 2025 compared to 2024.
• Iranian refineries competed aggressively, with up to 29% bids, to procure vacuum bottom, a critical raw material for bitumen production. Despite this competition, bitumen prices in the region remained stable at previous levels.

Geopolitical Risks Drive Volatility in Energy Markets

Political and economic turmoil is influencing global markets, with key developments including:

• Canadian Prime Minister Justin Trudeau's unexpected resignation has created uncertainty in North American trade and energy policies, impacting supply chains.
• The inauguration of Donald Trump marks a return to policies prioritizing U.S. energy dominance, with potential implications for global trade routes and energy partnerships.
• The ongoing war (Russia-Ukraine Conflict) shows no signs of resolution, affecting crude oil and energy markets, including disruptions in supply chains crucial to the bitumen industry.
• Escalating clashes in the region, including continued missile exchanges involving Israel and Yemen, and unrest between Israel and Hamas, are creating volatility in oil prices, which significantly influence bitumen pricing.
• Singapore and South Korea have reported rising demand in Q4 2024, largely due to infrastructure projects and seasonal maintenance.
• Bahrain and Iran are maintaining stable production levels despite geopolitical challenges, positioning themselves as steady suppliers in the global market.
  Energy Demand Factors:
• A severe cold wave across the Northern Hemisphere is driving up heating fuel demand, indirectly influencing crude oil and, consequently, bitumen prices.
• China’s rebound in demand following its economic reopening has increased pressure on regional crude and bitumen supplies.

Expert Opinion: Asia and Middle East Dominate Global Bitumen Pricing

• With Trump’s impending presidency, more fundamental changes in the bitumen market may be expected. India’s purchasing power is projected to improve in 2025 compared to 2024, despite a temporary correction in bitumen prices. 
• Global conflicts, including the Russia-Ukraine war and tensions in the Middle East, may continue to influence energy markets, adding volatility to the bitumen market.