Chinese bitumen futures firmer

Bitumen futures traded on China's Shanghai futures exchange (SHFE) rose today, edging up by 114 yuan/t ($17/t) to Yn2,402/t for the prompt-month BU2012 contract, tracking firmer crude prices.

The next heavily traded contract BU2101, due for physical delivery in mid-January, saw gains of Yn124/t to Yn2,438/t. This was up by around 5pc from yesterday in today's trading session.

Brent crude futures were hovering at $46/bl during today's afternoon trading session.

Trading volumes for the main December contract increased by 25,264 to 530,922 contracts, while trading volumes for the next heavily traded contract BU2101 saw an increase of 56,387 to 196,723 contracts. Each contract is 10t.

A east China-based trading firm pointed to persistently weaker domestic sales, despite the gain in SHFE settlements, with prices from state-controlled refineries including Sinopec still lower than December spot prices on the SHFE.

Chinese physical bitumen cargo prices were steady around Yn2,300-2,350/t in east China and around Yn2,850/t in south China on an ex-refinery basis, after falling by Yn100/t in the week ending 13 November.

Market activity across north and east China has generally slowed down in recent weeks, with the onset of wintry conditions in north China and lower temperatures in east China.

Offers from independent refineries in east China for stockpiling during winter emerged between Yn1,900-2,200/t ex-refinery. Few have yet started as trading firms holding stocks are not in a hurry to receive volumes until the outlook for next year's first quarter can be confirmed.

Sentiment remained bearish among most market participants, pointing to sales after the 1-8 October national day holidays that have not spurred much of the typical buying interest.

By Liz Ng