Bitumen markets in Southeast Asia are poised for a shift as increased export availability from South China meets a varied regional demand outlook for 2025, as reported by Argus Media. A combination of pent-up demand from delayed projects and new production initiatives could shape the market dynamics.
Near-Term and 2025 Demand Prospects
Pent-up demand from incomplete projects in 2024 is expected to drive short-term buying interest. Vietnam, Indonesia, and China experienced significant delays in 2024 due to adverse weather and government funding challenges. Indonesian infrastructure projects saw some outright cancellations, while Australian demand was subdued amidst high inflation and funding constraints.
In 2025, Chinese consumption could stabilize as the final year of the five-year economic plan focuses on infrastructure investments. However, uncertainties in the real estate sector and higher domestic production might limit import demand. In Vietnam, bitumen consumption could increase by 20-30% to reach 1.2-1.3 million tonnes, aided by improved funding conditions. Meanwhile, demand in Thailand and Malaysia is expected to remain steady, with New Zealand seeing a modest rise of at least 5%. Australia’s consumption could drop by 10% due to limited projects and uncertain budgets. Indonesia’s tight infrastructure funding is likely to keep demand unchanged.
Supply Boost from South China and Regional Refiners
South China’s Chambroad refinery in Hainan plans to export 400,000-500,000 tonnes of bitumen in 2025, potentially reducing import demand from other regions. Refiners in peninsular Malaysia and Thailand, which had previously curtailed bitumen production in 2024, are also set to resume operations this year. The resumption of production at Malaysia’s 270,000 b/d refinery and Thailand’s Map Ta Phut refinery could increase export supply.
Global trading firm Vitol’s 50,000-70,000 tonne bitumen storage facility in Tanjung Bin, Malaysia, set to become operational in 2025, may further enhance supply liquidity and enable inter-regional trade. However, its primary market focus remains uncertain.
Challenges and Logistical Developments
Logistical constraints, including tight vessel availability, are expected to persist into early 2025. Reduced production and weak demand in late 2024 caused some vessels to shift to other regions. However, the arrival of new, larger vessels (8,000-17,000 dwt) later in the year may ease transport bottlenecks.
As HSFO and bitumen prices align, refiners have less incentive to curtail bitumen production. Nevertheless, oversupply without corresponding demand growth could lead to output cuts.
Conclusion
The Southeast Asian bitumen market faces a complex interplay of increased supply and varied demand trajectories. While 2025 promises enhanced export capacity, regional consumption growth hinges on overcoming funding constraints and infrastructure policy challenges.
