Indian August bitumen imports hold as expectations firm

India's bitumen imports in August were mostly unchanged from the previous month as the monsoon season continued, although expectations are firmer about demand from October onwards.

Bitumen imports were 223,000t in August, up by 4,000t compared with July, oil ministry data show. Imports have mostly been at similar levels since April when funding issues depressed typical peak summer demand for road paving.

But imports in August were nearly double compared with the 112,000t a year earlier. Demand fell sharply in last year's third quarter as the country was still in the final leg of its Covid-19 lockdowns. Bitumen consumption steadily picked up following the end of the lockdowns from November 2021, the oil ministry data show, with imports rising to 554,000t and subsequently increasing to 944,000t by March 2022.

India's bitumen production was 195,000t in August, down from 248,000t a month earlier. Throughput rates in key refineries across India have stayed at 100pc overall in the past three months. But bitumen production has been relatively low as refiners tried to produce more gasoline and diesel. Firm diesel crack spreads this year has pushed refiners across Asia to look at higher production of the transport fuel.

India's state-controlled and private-sector refineries typically cut production rates for bitumen during the monsoon season and optimise output of middle and light distillates.

India's bitumen consumption for road paving is expected to remain weak until the end of September. But demand is expected to pick up after the monsoon ends around October and is likely to rise sharply from November.

Bitumen demand from pending projects across summer will also surface, along with demand typically expected following the end of the monsoon season. Overall demand is expected to rise sharply for road construction and result in higher imports.

There has been increased enquiries for Middle East-origin cargoes from India as a result. A flurry of these cargoes traded with Indian buyers in the past two weeks. A sharp drop in container freight rates also supported importers seeking regional cargoes.

By Sathya Narayanan