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Asphalt: African market commentary

  • Märkte: Oil products
  • 13.11.06

Johannesburg/span>

South Africa
Bitumen exports are taking a back seat in the South African market while refiners struggle to meet domestic requirements. Bitumen availability has been severely reduced by the fire at the end of last month on a hydrogen line at the 185,000 b/d Shell-BP Sapref refinery in Durban, which has halted bitumen production at the refinery until mid-January at the earliest.

 

The loss of production has coincided with the beginning of the high season for bitumen in South Africa and the period when road contractors move up a gear to complete works by the year-end.

 

Other refiners — namely the neighbouring Engen refinery and the Natref refinery near Johannesburg — are assisting Shell and BP, where possible, to cover sales commitments but all suppliers are facing a high level of demand.

 

Export enquiries have also increased in number as contractors on projects in other sub-Saharan countries also rush to complete works prior to the end of the year.

 

Demand for bitumen from Angola was described as a bottomless pit with volumes on single-term orders as high as 12,000 t/month.

 

With the recent increase in donor funds to sub-Saharan Africa, rampant demand from Angola and the approaching 2010 football World Cup in South Africa, the outlook for the South African bitumen market appears good.

 

Domestic bitumen prices were pegged at R2,800 ($387) in Durban, at around R2,955 ($409) in the Johannesburg region, and at R2,630 ($364) in Cape Town. All prices were unchanged from October levels.

 

Nigeria
The price for seaborne bitumen cargoes delivered into Nigeria was assessed some $10/t higher at $330-350/t c+f Nigeria in line with last week’s rise in European high-sulphur fuel oil (HSFO) prices. The assessed price reflects the price of Ivory Coast bitumen delivered into Nigeria and is the equivalent of an $85/t premium to the Argus published high quotation for HSFO cargoes fob Mediterranean.

 

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