Shanghai bitumen futures supported by crude

Bitumen futures traded on China's Shanghai futures exchange (SHFE) rose by another 56 yuan/t ($8.55/t) this week, bolstered by stable to firm crude prices. Brent crude futures were hovering at $48/bl yesterday but were even higher today with the latest Opec+ production agreement.

The heavily traded BU2012 contract closed yesterday at Yn2,446 for the prompt month. The next heavily traded contract BU2103, due for physical delivery by mid-March, saw gains of Yn80/t to Yn 2,576/t. This was up by around 3.2pc from the 2 December trading session.

Trading volumes for the main December contract increased by 692 to 34,008 contracts from 1 December but fell compared with a week earlier by 306,901. Trading volumes for the next heavily traded contract BU2103 rose by 26,921 from the 2 December trading session and 26,981 from a week earlier. Each contract is 10t.

Chinese physical bitumen cargo prices have also increased by Yn100/t across China on the back of firmer crude prices. Domestic prices were at Yn2,400-2,450/t in east China and around Yn2,950/t in south China on an ex-refinery basis.

Most trading firms have concluded December-loading sales and have not offered any cargoes in the week ending 4 December. Some pointed to limited volumes, with usual monthly spot supplies from South Korean refineries reduced in December.

China's 14th five-year economic plan for 2021-25 will start from next year. Government budgets for road projects have not been unveiled, making it difficult for buyers to discuss definite volumes and form business plans.

By Liz Ng