African bitumen buyers hit by container rate hikes

: Freight, Oil products
24/08/13

Another big jump in container shipping rates has driven up the cost of importing bitumen to sub-Saharan Africa in recent weeks, hitting buyers that rely on packaged supplies, especially road contractors in east Africa that depend on drummed bitumen from the Middle East for paving projects.

The latest surge in rates — which in many cases have shot up by at least 50pc on voyages to east, west and southern Africa compared with prevailing levels up until mid-July — is underpinned by a growing shortage of container ships globally. This has been triggered by longer east-west journey times as vessels sail around the Cape of Good Hope to avoid the risk of being attacked by Yemen's Houthi rebels in the Red Sea, a trend that shows no sign of abating.

Suppliers of drummed bitumen from Iran and other Middle East exporters point to worsening delays and shortages in container shipping services at storage and trans-shipment hubs in the region, such as Jebel Ali in the UAE. The longer voyages caused by the Red Sea boycott have meant increased bunker fuel consumption and more containers on the water.

International shipping lines have raised their rates for voyages from Jebel Ali to Mombasa in Kenya to $3,800/20ft container — equivalent to $190/t based on the typical number and size of bitumen drums in each container — from $2,700/container ($135/t) in mid-July. Rates to Dar es Salaam in Tanzania have jumped to $4,200/container ($210/t) from $2,800/container ($140/t) over the same period.

Rates for drummed supplies shipped direct to Mombasa and Dar es Salaam by the Iranian state-owned IRISL fleet have held steady in recent months at around $1,000/container ($50/t) and $1,100/container ($55/t), respectively.

Argus' latest assessment of Bandar Abbas/Jebel Ali freight rates for drummed bitumen shipments to Mombasa and Dar es Salaam is around $110/t and $125/t, respectively, up from $90-95/t in the week ending 19 July and $45/t in early December last year before the first wave of Houthi-related rate hikes.

First Covid, now this

Bitumen charterers say the container shipping problems have echoes of the jump in shipping rates during the Covid era. Bandar Abbas/Jebel Ali drummed bitumen rates to Mombasa and Dar es Salaam doubled from $55-60/t in May 2020 to peak at around $110/t in September 2022 before dropping back to $40-45/t in August last year ahead of the renewed spike.

Market participants also point to a large increase in international container shipping rates from the Mideast Gulf to other sub-Saharan African destinations. Rates to Matadi in the Democratic Republic of Congo have reached $6,450/container ($320-325/t) this month, compared with $3,700/container ($185/t) in June. Rates to Durban in South Africa were last week indicated around $3,200/container ($160/t), up from $2,700/container ($135/t) in June, while rates to Namibian ports recently jumped to $7,000/container ($350/t) from $4,000/container ($200/t).

West African markets such as Nigeria, Ghana, Cameroon and Senegal — as well as South Africa, which also supplies trucks into neighbouring southern African markets — are far less dependent than their east African counterparts on containerised flows, whether in drums, bitutainers or bags, as they are equipped with terminals that receive cargoes on heated bitumen tankers.

Exporters of containerised bitumen from the Mideast Gulf or Pakistan are now finding it even more difficult to compete with bulk cargo values.

Nigerian bulk tanker cargo import prices stood at $616/t on a cfr basis last week. This compares with around $600/t for Mideast drummed bitumen delivered to Apapa in Lagos. Drummed bitumen carries significant additional handling costs and other expenditure on delivery, with the solid bitumen having to be melted in specialised units before it can be supplied for road projects.

By Keyvan Hedvat

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

25/01/15

IEA nudges global refinery runs forecast higher

London, 15 January (Argus) — The IEA has made a marginal increase to its forecast for global refinery runs this year, driven by the "recent resilient performance" of US and European refineries. The Paris-based energy watchdog now expects global crude throughput of 83.4mn b/d in 2025, whereas its previous projection was 83.3mn b/d. At the same time, it has trimmed its estimate for 2024 runs by 20,000 b/d to 82.7mn b/d on the back of downgrades in Asian throughput. The slight upgrade to the 2025 forecast assumes that US and European refineries extend their recent resilience through the first quarter. But "even as we turn more positive on the short-term outlook, it is important to acknowledge that European refineries remain under pressure from shifting trade patterns, rising carbon costs, higher energy outlays and looming capacity closures", the IEA said today in its latest Oil Market Report (OMR). OECD throughput is forecast to fall by 370,000 b/d to 35.7mn b/d this year "as capacity closures in the United States and Europe drag on activity levels", the agency said. But it marks an upwards revision from last month's projection for the OECD of 35.6mn b/d in 2025. The IEA sees non-OECD refinery runs rising by 1mn b/d to 47.6mn b/d this year. This is a downwards adjustment of 80,000 b/d from the last OMR, but the IEA also trimmed its estimate for 2024 non-OECD throughput by the same amount — so the growth rate is unchanged. The 2025 forecasts for India, China, Pakistan, the Philippines and Singapore have all been cut compared with last month's OMR. The IEA now expects Chinese runs to rise by 240,000 b/d to 14.8mn b/d this year. Last month's forecast had Chinese throughput increasing to 14.9mn b/d. "2025 could prove to be another challenging year for Chinese independent refineries, despite increased crude import quotas, as higher import duties squeeze profitability and recent US sanctions impact access to Russian and Iranian barrels," the agency said. The IEA has raised its 2025 forecast for Nigerian throughput by 60,000 b/d to 460,000 b/d, citing the restart of state-owned NNPC's Warri and Port Harcourt refineries and the start-up of Dangote's 150,000 b/d residue fluid catalytic cracking unit. But it noted that challenges remain in terms of crude supply. By Josh Michalowski Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Q&A: Waste-based biofuel to benefit Dutch bunkering

25/01/15

Q&A: Waste-based biofuel to benefit Dutch bunkering

New York, 15 January (Argus) — With marine fuel greenhouse gas (GHG) emissions regulations tightening, shipowners are looking for financially feasible biofuel options. Argus spoke with Leonidas Kanonis , director for communications and analysis at European waste-based and advanced biofuels association (Ewaba), about biofuels for bunkering. Edited highlights follow. Do you think that the Netherlands government will scrap the HBE-G bio-tickets that it has been allocating for marine fuel for use by ocean-going vessels? HBEs are not disappearing in 2025, and the Dutch system will continue as normal, including HBE-G bio tickets. In 2026, the plan is that HBEs will be scrapped altogether, when the Dutch system switches to an Emissions Reduction Obligation. The Emissions Reduction Obligation would be a transposition of the Renewable Energy Directive (REDIII) spanning all transport sectors and HBEs would not exist under such a system. Annex IX of REDIII lists sustainable biofuel feedstocks for advanced biofuels (Part A) and waste-based biofuels (Part B). Under the proposed REDIII, EWABA is advocating those fuels made from feedstocks listed under Annex IX B, which include used cooking oil and animal fat, be allowed into the sustainability criteria for maritime transport. Allowing only "advanced" feedstocks listed under Annex IX A would put the Dutch bunkering sector at a cost-and-supply disadvantage compared with non-EU ports. The Annex IX B exclusion could also put the Netherlands in danger of not hitting its maritime sector target, which rises from a 3.6pc reduction in GHGs in 2026 to 8.2pc in 2030. Annex IX B biodiesel can bridge the gap while advanced technologies such as ammonia and hydrogen are more widely deployed. The EU imposed anti-dumping taxes on Chinese biodiesel imports in mid-August. What has been the effect on European biodiesel producers? Following the Chinese anti-dumping duties (ADDs), we have seen an uptick in domestic European waste-based biodiesel prices, widening the spread between the end product and the European domestic feedstock itself. On the other hand, on 1 December, the Chinese government cancelled the export tax rebate for used cooking oil (UCO), disincentivizing Chinese exporters and making Chinese UCO more expensive for European buyers. It is still early to say what the trend for 2025 will be, but as an industry we are optimistic about increased European biodiesel production. Over the past two years, our members have been suffering, mostly operating at sub-optimal production levels or forced to shut down production. In 2025, there is reserved optimism that the market will improve due to: the ADDs to Chinese biodiesel, the 2025 FuelEU maritime regulation, and the introduction of the EU Database for Biofuels introduced in 2024, which tracks the lifecycle of biofuels and strengthens transparency. Are there other threats next year that are facing the European waste-based and advanced biofuels producers? Overall challenges for the market would be demand for feedstock from competing industries, largely the sustainable aviation fuel (SAF) market with the introduction of the ReFuelEU mandate, but also competing regions as the US imported huge amounts of waste feedstocks from China last year, while southeast Asian and UAE countries promote their own bio-blending targets. Do you think Donald Trump's presidency would affect Europe's biofuel markets? We expect the Trump administration to possibly limit feedstock imports from outside the US, boosting the sales of local soybean and other crop feedstocks to produce domestic HVO, SAF and biodiesel. At the same time, the US government has noted they will impose duties on imports coming from anywhere, with China experiencing the most considerable level of duties of up to 60pc. For example, an import tax on European and UK biodiesel would mean that more fuel is available to fulfill the European and UK mandates, as the US is also relying on HVO and FAME from Europe and the UK to fulfill its own mandates. Biofuel for bunkering has been a popular low-carbon fuel option among container ship companies. But oil tanker owners and dry bulk carrier owners are slower to embrace biofuels. Do you see this changing? At the moment, most biofuels used in shipping are indeed for container ship companies that could more easily afford higher prices of bio components. The biofuels industry is receiving a lot of interest from tanker or carrier owners but for lower biofuel blends compared to container ship companies. Container vessels are willing to buy higher biofuel blends and are interested in B100. Oil tankers are focusing more on B15 and higher bio blends to comply with the minimum GHG reduction targets possible. But as the GHG reduction targets on the FuelEU rise, this will of course change as well. In 2030, what do you project will be the demand for biofuels for bunkering in Europe? As an estimation, we expect waste biofuels bunkering demand in Europe to surpass 2-2.5mn tons by 2030. Specification-wise, what are some of biofuel properties that ship owners need to look out for? We don't believe waste-based and advanced biodiesel fuel properties have considerable issues for ship operators. Especially for blends up to B30, there is nothing to worry about. For higher blends, viscosity and stability are the ones that I believe are more important. Storage time is also important to consider due to lower oxidative stability of FAME compared with fossil diesel alternatives that could be stored longer term. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Colonial shuts Line 1 due to Georgia spill: Update

25/01/14

Colonial shuts Line 1 due to Georgia spill: Update

Houston, 14 January (Argus) — Colonial Pipeline's main gasoline bearing line may be closed for more than a day as the company responds to a gasoline spill in Georgia detected on Tuesday. "Colonial has taken Line 1 out of service temporarily while we respond to a potential product release," the company said in a notice. "Normal operations continue on the remainder of the system." The spill occurred in Paulding County, Georgia, about 25 miles southwest of Marietta, Georgia. The company said it had crews on site responding to the incident. The company did not provide information on when the line would restart. Market sources said leak was small but it could take up to two days to resume operations. Line 1 has capacity to carry up to 1.3mn b/d of gasoline from Houston, Texas, to Greensboro, North Carolina. Cash prices for US Gulf coast 87 conventional gasoline in the Gulf coast ended Tuesday's session down by 3.19¢/USG at $2.115/USG, reversing gains from the previous session's 14-week high that was driven by higher blending demand. Liquidity fell during Tuesday's trading session with uncertainty over the length of the pipeline shut-down. The pipeline leak did not affect line space trading on Tuesday, which had already been falling. Values saw their sixth session of losses, shedding 0.25¢/USG day-over-day. A trade was reported at -1.5¢/USG, prior to the notice of the pipeline shut down, with no further trades reported for the remainder of the session. By Hannah Borai Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

New York to propose GHG market rules in 'coming months’

25/01/14

New York to propose GHG market rules in 'coming months’

Houston, 14 January (Argus) — Draft rules for New York's carbon market will be ready in the "coming months," governor Kathy Hochul (D) said today. Regulators from the Department of Environmental Conservation (DEC) and the New York State Energy Research and Development Authority (NYSERDA) "will take steps forward on" establishing a cap-and-invest program and propose new emissions reporting requirements for sources while also creating "a robust investment planning process," Hochul said during her state of the state message. But the governor did not provide a timeline for the process beyond saying the agency's work do this work "over the coming months." Hochul's remarks come after regulators in September delayed plans to begin implementing New York's cap-and-invest program (NYCI) to 2026. At the time, DEC deputy commissioner Jon Binder said that draft regulations would be released "in the next few months." DEC, NYSERDA and Hochul's office each did not respond to requests for comment. Some environmental groups applauded Hochul's remarks, while also expressing concern about the state's next steps. Evergreen Action noted that the timeline for NYCI "appears uncertain" and called on lawmakers to "commit to this program in the 2025 budget." "For New York's economy, environment and legacy, we hope the governor commits to finalizing a cap-and-invest program this year," the group said. State law from 2019 requires New York to achieve a 40pc reduction in greenhouse gas (GHG) emissions from 1990 levels by 2030 and an 85pc reduction by 2050. A state advisory group in 2022 issued a scoping plan that recommended the creation of an economy-wide carbon market to help the state reach those goals. By Ida Balakrishna Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Biomethan: Missbrauchsverfahren gegen THE gestartet

25/01/14

Biomethan: Missbrauchsverfahren gegen THE gestartet

Hamburg, 14 January (Argus) — Die Bundesnetzagentur hat auf Anfrage von acht Unternehmen der Biogasbranche ein besonderes Missbrauchsverfahren gegen Trading Hub Europe eingeleitet. Die deutsche Gasbörse hat die Bilanzkreise der Landwärme Service am 11. Oktober 2024 gekündigt. Dadurch sind Vertragspartnern wirtschaftliche Probleme entstanden. Ein Unternehmen, dem ein Bilanzkreis vom Marktgebietsverantwortlichen gekündigt wird, darf Biomethan weder liefern noch entgegennehmen. Vertragspartner der Landwärme Service (LWS) konnten deshalb von einem Tag auf den anderen nicht mehr auf die Mengen zugreifen, die von LWS oder ihnen selber zuvor schon in den Bilanzkreis eingespeist wurden. Somit haben sie für 2024 auch keinen Anspruch auf Nachweise über die Nachhaltigkeit ihres bereits erhaltenen oder eingespeisten Biomethans. Diese sind allerdings notwendig für Anlagenbetreiber, da diese in der Regel EEG-gefördert sind. Sollten sie bis Ende Februar keine entsprechenden Nachweise erhalten, könnten Unternehmen daher ihre EEG-Förderung verlieren. Kunden, Lieferanten und Produzenten, die einen Vertrag mit LWS hatten, mussten sich dementsprechend umorientieren und versuchten neue Lieferverträge zu etablieren. Dies steigerte auch die Nachfrage und verteuerte Biomethan in Deutschland im Oktober. Grund für die Anträge für ein Missbrauchsverfahren ist nun, dass die Vertragspartner von LWS noch immer keinen Zugriff auf ihre Mengen haben und auch keine Informationen erhalten haben, was mit diesen geschehen ist. Ein Antragsteller erklärte, dass er sich von dem Verfahren eine Wiederherstellung der Mengen oder eine finanzielle Kompensation erhofft. Trading Hub Europe soll den betroffenen Geschäftspartnern im November ein Angebot gemacht haben, zumindest einen Teil der Mengen gegen Zahlung eines Ausgleichsenergiepreises wieder in Biogasbilanzkreise einzustellen, so Unternehmen. Dieser Preis war für viele jedoch zu hoch angesetzt und hätte nur etwa 30 % der Mengen wiederhergestellt. Gleichzeitig wäre das Problem der Nachhaltigkeitszertifikate durch dieses Angebot weiterhin nicht gelöst. Viele der betroffenen Unternehmen wollten dieses Angebot nicht annehmen, da es weder attraktiv noch wirtschaftlich war. Die Anträge der Unternehmen gingen zwischen dem 17. Dezember und 20. Dezember 2024 bei der Bundesnetzagentur ein. Bei den Antragsstellern handelt es sich um die Biomethanproduzenten und -händler Verbio und EnviTec Energy, die Versorger STAWG – Stadt- und Städteregionswerke Aachen, Energie Schwaben und Stadtwerke Passau sowie die Biomethandienstleister und -händler GETEC Energy Management und GETEC Green Energy. Der genaue Grund für die Kündigung der Bilanzkreise ist nicht bekannt. Laut Trading Hub Europe (THE) ist eine außerordentliche Kündigung aus wichtigen Gründen möglich. Dies ist zum Beispiel der Fall, wenn gegen Bestimmungen trotz Abmahnung schwerwiegend verstoßen wurde, der Bilanzkreisverpflichtete seiner Verpflichtung einer Sicherheitsleistung oder Vorauszahlung nicht fristgerecht oder vollständig nachgekommen ist oder wenn dieser fahrlässig falsche oder unvollständige Angaben bei der Zulassung gemacht hat oder nicht über Änderungen der Angaben informiert hat. Ein weiterer Grund für eine Kündigung kann eine erhebliche Unterspeisung des Bilanzkreises sein, hier sei die Kündigung auch ohne wiederholten Verstoß und ohne Abmahnung möglich. Von Svea Winter Senden Sie Kommentare und fordern Sie weitere Informationen an feedback@argusmedia.com Copyright © 2025. Argus Media group . Alle Rechte vorbehalten.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more