Higher asphalt prices in Iran were taken in stride, with industry participants shrugging off the rise as inevitable, given high oil prices. Iranian bulk cargoes were priced at $155-160/t, with strong domestic demand and lesser-than-expected supply from refineries cutting into the volume available for export. Drums were priced around $205-225/t.
Industry sources watched the loading of the vessel Selamat with a cargo destined for Nigeria with interest. Most expected that the cargo was a one-off, since it was difficult to understand how the economics of moving asphalt from Iran to Nigeria, a voyage which lasts almost a month, could be feasible. Freight was estimated to cost $150/t. The vessel is loading 4,000t from Bandar Busheyr for Nigeria. The vessel is expected to take seven days to load because of the slow delivery of asphalt from the refinery.
A rise in Bahrain asphalt prices to $165/t was not well received, with customers switching to Iran for cheaper cargoes. But Bahrain mulled the possibility of increasing prices by another $5-10/t despite admitting that demand was sluggish.
Demand for asphalt was muted in UAE because of Ramadan. But weak demand in Qatar was expected to pick up significantly after November when new construction projects are due to be announced.
Industry sources were divided over what impact a month-long shutdown of the 225,000 b/d Yanbu refinery in Saudi Arabia would have, with some suggesting that the country would emerge as an importer. Others expected that smuggling out of Saudi Arabia would be clamped down upon to ensure that there was enough for the domestic market. The Yanbu refinery provides the feedstock for the asphalt producer Luberef.
State-owned Saudi Aramco is shutting its third-biggest refinery for a 35-day upgrading and maintenance program, to be completed in December, which should raise gasoline output by 50pc.The refinery will produce as much as 60,000 b/d of gasoline after the shutdown. Among the units to be added are a continuous catalyst regeneration unit, isomerization unit and a diesel hydrotreating complex.
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