London
Spain
Spanish domestic
bitumen prices are still at around €255-275/t ($320-345/t) ex-works. Bitumen
demand rose by 3-5pc in September.
Rain, particularly in the north of the country, has momentarily depressed demand for bitumen but it is expected that all major road-building projects will be completed on time before the onset of winter. Demand in the south is unaffected.
Germany
Prices were pegged
at €245-265/t ($308-333/t) ex refinery depending on region.
No significant changes are expected for November pricing even though demand has started to slow down going into the winter months, sources said. Demand and supply fundamentals were balanced, helped in part by a four-week shutdown of the vacuum distillation unit at BP’s 265,000 b/d Gelsenkirchen refinery in southwest Germany, which has resulted in the cessation of bitumen production.
Netherlands
Bitumen
prices held steady in the €250-265/t ($314-333/t) delivered range, underpinned
by tighter supply.
Although market sources said it was premature to discuss November pricing, some were anticipating a rollover in November. Refinery turnarounds in neighbouring Germany and Belgium had resulted in reduced imports, but warmer-than-normal weather this month had resulted in higher demand which so far is showing little signs of tapering off yet, sources said.
France
Bitumen
demand this autumn has been buoyed by a rush by contractors to complete road
projects by the end of this year. The heightened activity is a direct result of
the supply crunch earlier in the summer. The extended shutdown of Shell’s
146,000 b/d Petit Couronne refinery — a major bitumen production hub for
northern France — following a fire in June forced some contractors, including
Colas the road-building unit of the Bouygues group, to defer road projects
until later in the year.
French bitumen demand for the first eight months of this year was 1pc down on 2005. Demand in September was in line with a year ago, but expectations are that demand for this month will exceed last year.
Bitumen prices this month are €10-15 ($13-19) down on September levels. Prices in the south of the country are pegged at around €280-295/t ($350-369/t) delivered and in the north at €270-290/t ($338-363/t) delivered. Prices in the central region were assessed at €270-295/t ($338-369/t) delivered.
Bitumen prices were expected to remain stable for the remainder of the year provided there are no large spikes in oil prices.
Hungary
Hungary’s accession to the EU in 2004 has
helped swell the country’s bitumen demand by some 60pc in the last two years.
Total bitumen demand was around 250,000t in 2004. This year it is on target to
exceed 400,000t.
Road bitumen accounts for around 95pc of total bitumen demand and the austerity package the EU has forced Hungary’s government to implement in order to reduce its budget deficit, is likely to mean that bitumen demand in 2007 will fall short of this year’s total. The impact of cuts in government expenditure on its road-building programme is still uncertain. EU funds are available for road projects but to receive these Hungary has to contribute a proportion of the project cost.
Industrial bitumen demand remains stagnant at around 20,000 t/yr.
September and October are peak months for bitumen demand. November will see a fall in road paving activity, depending on the weather, but the market will remain active until mid-December.
The country’s sole refinery, Mol’s 160,000 b/d Szazhalombatta refinery southwest of the capital Budapest, supplies around 70-75pc of the country’s demand, with the balance supplied by imports from Germany, Austria and the Czech Republic.
Main export destinations for Hungarian bitumen are Romania, Croatia, Bosnia and Slovakia. Around 30,000-40,000t of road bitumen is exported to Slovakia each year.
The price with discounts of 50/70 pen bitumen was assessed at the equivalent of around €280-295/t ($350-369/t) delivered.
Slovakia
Slovakia is
heavily dependent on bitumen imports as its one refinery — the 115,000 b/d
Slovnaft refinery at Bratislava — produces only modified bitumen.
Slovakia, as in neighbouring Hungary, has seen a sharp increase in its demand for bitumen since 2004 when it became a member of the EU. Total bitumen demand this year is put at around 180,000t, of which some 150,000t are road grade bitumen.
Slovakia has a large road-building programme but a number of the projects are behind schedule, according to sources.
Competition between importers means that the price of bitumen is below that in neighbouring Hungary and is currently pegged at the equivalent of €260/t ($325/t) delivered.
Switzerland
Fundamentals in the
Swiss bitumen market remain little changed from September. Dealers quote
ex-rack prices from suppliers in southern France or Germany at around €230/t
($289/t), only marginally softer than September levels.
Warm early autumn conditions have supported strong demand for bitumen into October, and demand looks set to remain robust until the end of October and the onset of more wintery weather. At the same time, the supply of bitumen remains plentiful in both eastern and western Switzerland, keeping the market stable.
Earlier in October, EU transport ministers voted to ratify the Alpine Convention protocol, which includes the adoption of strategies to avoid the construction of more multi-lane highways as part of efforts to protect the Alps from increasing road traffic. Switzerland has yet to ratify the treaty, despite signing up to it six years ago.
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