Bitumen demand in India is likely to come under pressure as lockdowns and curfews imposed to curb the spread of Covid-19 result in a slowdown of road construction and infrastructure work.
Bitumen consumption has slumped this month following a firm pick-up in March, according to market estimates. Road construction projects have been affected across key states because of the pandemic, a local trader said.
Bitumen imports are likely to fall below 100,000t this month, local market participants said. This would be down from the 137,000t imported in February, the latest month for which oil ministry data are available.
Covid-19 has already cost the industry part of the summer peak paving season, which typically ends in May ahead of the monsoon in June, the trader added.
India recorded over 379,000 new cases yesterday, the highest one-day tally so far. Total coronavirus cases have surged to over 18mn, making the country the second-most infected region behind the US and prompting new restrictions to curb the spread of the infection.
The capital Delhi and the government of Maharashtra state have extended lockdowns, while the state of Karnataka has also imposed fresh curfews.
Bitumen demand has fallen significantly since the new lockdowns as labourers migrate back to hometowns, All India Motor Transport Congress (AIMTC) secretary general Naveen Kumar Gupta said.
Road paving projects have slowed in the past two weeks because of a lack of labour and this is expected to continue for the next several weeks, said a second Mumbai-based trader.
Driving activity across India was 24pc below a 13 January 2020 baseline on 26 April, mobility data from US technology firm Apple show, compared to 29pc above the baseline on April 1.
The lockdowns and restrictions have put further pressure on already depressed fuel demand, although most Indian refiners are running their plants close to capacity.
Refiner Bharat Petroleum (BPCL) has cut its listed prices of bitumen in Mumbai and some key western Indian cities by 2,000 rupees/t ($27/t), effective 28 April, in an effort to sell existing stocks amid falling demand.
Bitumen inventories at importers have risen through April, adding to pressure on local prices. India is a major importer of bitumen from the Middle East, with imports from the region hitting 1.2mn t in the April 2019 to March 2020 financial year. Full-year import figures for 2020-21 are unavailable, although demand rebounded from October-November last year as India emerged from Covid lockdowns and a heavy monsoon season.
India's bitumen consumption reached a record high of 7mn t in 2020-21, despite the severe impact of Covid-19 on local demand.
