1. Domestic Bitumen Market Reviews:

 

    In NE-China Market: Each refineries was under stable shipment and traders’ purchasing activities turned weak, with the prevailing price of heavy traffic bitumen around Yuan 4,400-4,600/mt.The daily output in Liaohe PC reduced to 1800mt for one week, then increased to 2600mt, and the monthly output was 90,000mt with the contract offer steadied at Yuan 4,500/mt.Panjin Northern Bitumen recovered heavy bitumen operation on 5^th, the monthly output reached 30,000mt with 3000mt inventory by the end of this month, and the offer firmed at Yuan 4,700/mt. The daily output in Panjin Northern Fuel CO. was 700mt with the offer flat at Yuan 4,700/mt and Yuan 4,600/mt for contract clients. Panjin Taipinghe PC shun down the old operation unit to introduce new unit at the end of this month for two months. During Olympic, the transportation and construction was severely restricted in Beijing region, the cargoes sales mainly focused in NE-China and Inner Mongolia regions. So the wholesale demand turned weak.

    

    In NW-China Market: The bitumen demand in this region rose, the market became active and much bidding was carried out. Traders denoted there was not much bitumen to do retail, except supplying for construction project. But as most traders wanted the imported bitumen, the domestic bitumen demand was in common satiation. Presently the local bitumen was supplied for small-scale items. Influenced by the price-hiking in Karamay Refinery, the local heavy traffic bitumen was prevailed around Yuan 4,300-4,500/mt, normal bitumen was dealt around Yuan 3,900-4,400/mt. Sian PC and Tahe PC (belong to Sinopec) offered steadily; while Karamay Refinery (belong to PetroChina) picked up offers by Yuan 200/mt.

    In E-China Market: Traders watched as the market sentiment was muted in this region. Although offers from partial refineries slid slightly, the whole market prevailing price still around Yuan 4,350-4,450/mt. Due to the cost pressure, adding bitumen price fluctuated slightly, many plants did not want to drop the offers. Therefore refineries controlled resources severely in order to avoid the price-dropping with few supplies. The imported bitumen increased this month but with sliding FOB offers around Yuan 4,450-4,600/mt. As the price of homemade bitumen was low, so many small-scale end-users chose to use it. In whole, the homemade bitumen still dominated the domestic bitumen market for a short stage.

 

    In S-China Market: the heavy traffic bitumen was dealt around Yuan 4,350-4,450/mt with thin demand in this region, and the sales turned better at the end of this month. But the demand was at low level as the construction was in thin season. The sale outside the region focused in SW-China and E-China regions.

 

    As the domestic bitumen demand remained muted, and the price-dropping of crude oil as well as other oil product, traders anticipated the following bitumen market would continue to decline.

 

    In demand: As the brokers operated cautiously, the purchasing amount was few; the demand remained at low level due to the lack of big constructions. The capital flow to road project maintained pessimistic state, which led the whole demand lingered at low level.

 

    In supply: The muted market and the loss of refineries made the domestic bitumen plants linger. A player denoted the plants would ensure the offer but not the quality, if the demand still remained muted.

In the first half year of 2008, the total output reached 6,910,000mt, dropped by 8.10% than that of last year. The high coat and low demand made the refineries changed their production modes.

 

    All in all, the bitumen price would remain stable but with low output in August.