Turkey's Tupras has issued a tender to sell around 1mn t of bitumen on a fob basis from its Izmit and Izmir refineries next year, significantly more than it offered under its equivalent 2023 tender.
Buyers and sellers across the Mediterranean and northern Europe are starting their discussions for 2024 term volumes at a time of huge uncertainty over the price direction of crude and high-sulphur fuel oil, the latter being the main basis for bitumen pricing in the region. There is also uncertainty over bitumen demand, with the level of government infrastructure spending unclear.
The details of the Tupras tender, expected to be awarded by the end of this week, have not yet been disclosed, but bidders said the offered volumes could include vacuum residue, which international trading firms sometimes buy from Tupras to convert at their terminals to bitumen grades.
Some market participants think Tupras will struggle to find buyers for the whole amount on offer, given weak construction activity and bitumen consumption in several key European markets at the moment and no signs yet of a significant rebound next year.
Tupras is widely understood to have awarded a separate 2024 sell tender for one 12,000t cargo a month on a delivered basis using one of its own tankers, the 14,787 dwt T Adalyn, to French construction company Colas' shipping unit Continental Bitumen. Trading and supply firms said that tender was awarded at a premium in the $80s/t to fob Mediterranean high-sulphur fuel oil cargoes on a delivered basis western France, where Colas runs a bitumen terminal at Blaye. Tupras and Continental have yet to comment on the details.
In its annual tender for 2023 exports from the Izmit and Izmir refineries, which were awarded to a number of major trading firms, Tupras offered up to around 500,000t in total, with one 5,000-30,000t cargo a month stipulated from Izmit and/or Izmir. Izmit mainly handles smaller 5,000t cargoes, while larger cargoes up to 30,000t are loaded from Izmir's Aliaga terminal.
In addition, sizeable exports of bitumen trucked from Iraq's Kurdistan region have been shipped from non-Tupras terminals in and near Ceyhan in Turkey this year, most notably the new Dortyol terminal. But both large and small shipments from Dortyol have dried up in recent months amid diminishing returns from such export sales.
Tupras' bitumen production increased to 1.5mn t in the first seven months of 2023, according to the latest official data from energy market regulator EPDK, up by 18pc up on the same period of 2022. While some was used to meet domestic summer paving season demand, nearly half of it was exported. In the absence of profitable export openings to the US and Asia, these flows added to surplus Greek, Italian and Spanish bitumen to generate an oversupply in the Mediterranean and northern Europe.
