The bitumen market in the Indian subcontinent is a tale of two distinct yet interconnected narratives: India’s massive consumption driven by infrastructure needs and Pakistan’s evolving export dynamics.
India: Growth Amid Financial Constraints
India, the largest consumer of Middle Eastern-origin bitumen, has seen its annual consumption surpass 8 million tons in recent years. However, delayed disbursement of project funds by state governments continues to create challenges for the market. Importers and traders face significant payment recovery issues as contractors demand extended credit terms to cope with funding delays.
While demand remains stable due to numerous ongoing and delayed infrastructure projects, growth prospects for 2025 appear limited. Refiners, producing around 5 million tons annually (55-60% of national consumption), predict only a 3-4% increase in demand for the coming year. This falls short of the central government’s ambitious projection of 14%.
High inventory levels and rising import costs, driven by supply disruptions in Iran, have forced Indian traders and refiners to offer steep discounts. These measures, aimed at liquidating stock, have significantly squeezed profit margins, underscoring the financial strain across the supply chain.
Pakistan: Export Opportunities and Challenges
Pakistan’s National Refinery Limited (NRL) recently issued tenders for January, offering 8,000 tons of bulk and drummed bitumen. These cargoes are often sought by international traders for export to South Africa, showcasing Pakistan’s role as a key supplier in the region.
However, regional supply constraints also impact Pakistan’s exports. Iran, a significant bitumen supplier for the subcontinent, faces logistical delays, including feedstock shortages and congestion at Bandar Abbas port, which have driven up costs. Additionally, the Iranian central bank’s decision to phase out the Nima platform has increased uncertainty around exchange rates, adding further pressure to exporters.
A Volatile Yet Vital Market
According to Argus Media, while the subcontinent’s bitumen market offers growth potential through infrastructure projects, it faces challenges ranging from financial constraints in India to supply chain issues in Pakistan. The region’s market dynamics highlight the delicate balance between demand and operational pressures as 2025 unfolds.
