New York, 23 August (Argus)
South Africa
The export price for bitumen was assessed at around $240-245/t fob Durban, some $10/t higher than in July. Demand as reported to be stable, particularly from the Indian Ocean islands.
Exporters were receiving ongoing enquiries from buyers in Nigeria but it has been "a good couple of months" since a south African cargo was taken into Nigeria, sources said.
South African bitumen exports continued to come under severe competition from bitumen out of Iran. With bulk bitumen out of the Iranian port of Bandar Abbas priced at around $140/t fob, the price differential between two countries is currently close to $100/t.
Bitumen production resumed last month at Engen’s 125,000 b/d Durban refinery following a problem with the reformer in June but a full shutdown, which was originally scheduled to start at the end of August, has been deferred to October. The delay has forced the refinery to undertake running repairs to the reformer and as a result the refinery is operating at below capacity.
Shell-BP’s 185,000 b/d refinery in Durban is scheduled for a 30-day major shutdown in mid-September. Caltex’s 100,000 b/d Cape Town refinery will undergo a full turnaround between 10 October and 15 November.
Domestic bitumen prices were pegged at R2,200/t ($338/t) in Cape Town and R2,305/t ($354/t) in Durban and Johannesburg.
Nigeria
Buyers from Nigeria have been in talks with sellers over taking 4,500t per month of bulk bitumen from Iran, according to market sources.
Iran is not a traditional source of bitumen for Nigeria due to the high cost of freight. But with the fob price out of Bandar Abbas some $100/t below the Durban and Ivory Coast prices, Iran’s lower export price could more than compensate for the additional freight costs.
Nigeria may have been forced to look for alternative sources of bitumen if it was receiving less from Venezuela, one of its traditional suppliers, sources said.
Bitumen supply out of the Ivory Coast has also been intermittent in recent months. A lack of heavy bitumen-rich crude forced the country’s 10,000 b/d bitumen refinery at Abidjan to switch to a lighter crude in July and to produce gasoil and diesel rather than bitumen. The adjoining 70,000 b/d Abidjan refinery has been running at around capacity levels recently in a bid to take advantage of strong refining margins. This has placed the plant under pressure and it was forced to shut for about a week at around the end of July to fix a problem in the vacuum distillation unit.
A landed price of south African bitumen was assessed at a minimum of $320-325/t c+f Nigeria, based on an export price of $240-245/t fob Durban and shipping costs of some $80/t.
A Nigerian landed price of bitumen from the Ivory Coast’s 10,000 b/d bitumen refinery at Abidjan was assessed at around $315-325/t c+f Nigeria, based on freight costs from Abidjan to Nigeria of around $45/t. The assessment was based on a price of around $270-280/t fob Abidjan, that is, a premium of $20-30/t to current market quotation for high-sulphur fuel oil fob Mediterranean.
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