Algerian bitumen cargoes cancelled in Spain dispute

Algerian bitumen importers have cancelled two cargoes that were to have been delivered in June, as a direct result of the government's decision earlier this month to suspend a friendship and co-operation treaty with Spain.

The cargoes, each of around 5,000t, were to have been delivered by Spain's Cepsa from Tarragona to terminals at Ghazaouet and Djen Djen, which serve two of Algeria's private importers. It is likely that no Spanish cargoes will be shipped to Algeria in July or beyond unless there is a rapid resolution of the diplomatic spat.

The importer into Djen Djen has sourced a replacement cargo from state-owned Sonatrach's refinery and export terminal at Augusta, Sicily. Sonatrach is itself by far the biggest bitumen importer into Algeria, but has this year almost exclusively imported cargoes into its numerous Algerian terminals from Augusta. The latest was delivered into Algiers on 19-20 June on the 7,499 dwt bitumen tanker Poestella.

Algeria has imported 42,000t of bitumen from Spain, primarily from Tarragona, and 107,000t from Italy, primarily from Augusta, this year according to Vortexa.

The halt to Spain-Algeria flows is being viewed with great concern by Spanish exporters, which have so far this year enjoyed higher bitumen export prices and premiums than their central and east Mediterranean counterparts. Any prolonged halt will significantly dent Spanish export sales and limit summer season price gains.

Algeria announced an end to its side of a 2002 co-operation agreement with Spain on 8 June, three months after Madrid publicly recognised Morocco's autonomy plan for Western Sahara that would enable Rabat to retain sovereignty over the contested former Spanish colony on the west African coast.

By Keyvan Hedvat and Tom Woodlock