Spanish refiner Cepsa will supply Portugal's Galp with up to 35,000t of bitumen next year under the latter's annual tender for deliveries into its Viana do Castelo terminal in northern Portugal.
Neither party has disclosed the price, although market participants expect a lower delivered premium to fob Mediterranean high-sulphur fuel oil (HSFO) cargoes than under Galp's 2023 tender, which was also awarded to Cepsa. Delivered premiums are understood to have been in a $75-80/t range in the 2023 tender.
The outlook for European bitumen markets next year is downbeat following a weak 2023. Some Mediterranean and Scandinavian term volumes for 2024 are being agreed at much lower fob and delivered differentials to HSFO than under 2023 deals.
Next year's Galp tender specifies a minimum of eight and a maximum of 10 cargoes, the same as under the firm's 2023 award. The latest tender stipulates each cargo as 3,500t, but Galp is understood to have secured more flexibility on cargo sizes this time so that it can require as low as 3,000t.
Bitumen storage capacity at Viana do Castelo is around 4,500t, but requirements vary during the course of each year, partly because of routine terminal maintenance but also due to reduced truck offtake in the winter months, which leaves less spare tank capacity to accommodate incoming cargoes.
