<article><p class="lead">Nigeria's bitumen demand has this year failed to give its usual lift to the market, because its construction sector has been constricted by Covid-19 lockdowns, falling oil revenues and latterly by an early start to the rainy season.</p><p>The key regional importer consumed around 300,000t of bitumen last year, virtually all of it sourced overseas. This was up by 10-15pc on the previous year, because President Muhammadu Buhari's re-election in February 2019 gave the country's infrastructure sector <a href="https://direct.argusmedia.com/newsandanalysis/article/1864267">a fresh boost</a>.</p><p>From March to July last year, and then from October onwards after a late, prolonged rainy reason, road highway and bridge construction projects were active, drawing substantial imports from Ivory Coast refiner SMB's bitumen refinery in Abidjan and from the Mediterranean region.</p><p>Momentum was maintained in the first quarter of this year, but Covid-19 slammed on the brakes. Extensive lockdowns were imposed in Nigeria from 30 March until 4 May, the lifting which has not provided for a resurgence in project work and bitumen offtake from import terminals.</p><p>This is largely because of a slump in Nigerian oil revenues, falling free market rates for the Naira against the US dollar and heightened trade financing issues, all of which have been compounded by an early start to the rainy season that will continue until September or October. </p><p>Nigeria's Petroleum Products Pricing Regulatory Agency (PPPRA) said that inland stocks of bitumen peaked at 52.9mn litres (54,000t) on 29 May, compared with 42.7mn l (44,000t) on 27 February. That inventories have since dropped to 21.8mn l (22,000t) on 22 June mainly reflects a lack of cargo deliveries, as importers opt to use stocks to meet low levels of demand.</p><p>Traders and ship brokers in the Mediterranean region have reported few inquiries, let alone fixtures, for spot bitumen cargoes to move to west Africa, most notably to Nigeria. Ivory Coast exports to Nigeria have been conspicuous by their absence — the most recent cargo moved by SMB from Abidjan to Nigeria on its time-chartered 4,900 dwt bitumen tanker <i>San Biagio</i> was in January.</p><p>SMB shut its Abidjan refinery — which has 300,000 t/yr of bitumen production capacity — in early June because of a crude-supply delay, having run it at around <a href="https://direct.argusmedia.com/newsandanalysis/article/2098614">one-third of capacity</a> through April and May because of a sharp drop in west African demand. It <a href="https://direct.argusmedia.com/newsandanalysis/article/2115600">has been restarting</a> over the past week to 10 days.</p><p>The few cargo shipments into Nigeria in the second quarter have mainly been 5,000-10,000t consignments from Lome, Togo, where French firm Rubis runs a 30,000t bitumen terminal. Rubis typically moves bitumen to Lome on its own tankers, and has made two such shipments since March, both from the Motor Oil Hellas export terminal in Agio Theodori, Greece.</p><p class="bylines">By Keyvan Hedvat</p></article>
