Romanian bitumen demand down sharply

Bitumen demand in Romania fell again in 2022, hit by rising government budget deficits caused by the Covid-19 pandemic and construction cost increases.

Latest data from Romania's National Institute of Statistics show bitumen consumption at 547,000t last year, down by 16pc from 648,000t in 2021 and 44pc lower than in peak construction year 2020, when 786,000t was consumed in one of Europe's major bitumen import markets.

The sharp decline is part of a wider hit on requirements for the road paving product across Europe and the Mediterranean region, caused by a price surge related to Russia's war in Ukraine and by spiralling energy costs incurred in running mixed asphalt plants and road construction machinery.

With domestic Romanian bitumen truck prices having come off sharply from a €570/t ex-works peak in November to €460/t last week, and with a number of new road and highway projects approved by the government, there is now cautious optimism ahead of the paving season, although rising interest rates and financial constraints loom large.

The country's sole bitumen-producing refinery, Rompetrol's 8,000 b/d Vega in Ploiesti, has just restarted after its usual winter halt. Its output fell in response to a weakening market, from 122,000t in 2020 to 93,000t the following year before a partial rebound in 2022 to 100,500t.

The official data, spanning cargo, truck and rail imports, show bitumen flows into Romania from Serbia and Poland were hit hardest over the past two years. Refiner NIS' flows from its Pancevo, Serbia, plant fell from 110,000t in 2020 and 96,000t in 2021 to just 15,000t last year. Imports from Poland edged down from 125,000t in 2020 to 122,000t in 2021 and then dropped to 51,000t last year.

Romanian bitumen imports from Austria only totalled 17,000t in 2022, down by 56pc from 39,000t in 2020 and by 47pc from 32,000t in 2021.

Strong price competition from Greece and Bulgaria made it more difficult for some of the long-established exporters like Hungary, Poland and Serbia, with Turkish exporters looking to gain a foothold in Romania. Buyers in Romania have bought less Polish bitumen, mostly because of the higher truck freight costs making delivered prices too high east of the Carpathian mountains. Lower imports from Austria were partly linked to an unplanned two-month slump in production at OMV's Schwechat refinery last summer, linked to a crude distillation unit halt.

Romanian imports from Hungary have remained fairly strong. They rebounded to 125,000t last year, having dropped sharply to 95,000t in 2021 from 122,000t the previous year. Imports from Greece have increased in recent years, from 96,000t in 2020 to 100,000t in 2021 and 125,000t last year.

Vessel tracking data from Vortexa show Romania imported 118,100t of bitumen in cargoes shipped to terminals at Galati, Constanta and Mangalia in 2022. The majority was sourced from Greece and Turkey, with the latter at 63,000t.

Romanian bitumen cargo imports stood at 185,400t in 2020 and 103,800t in 2021.

By Tom Woodlock