Bitumen market conferences - asphaltes.org¨s AIA 2010 - bitumen... · roads construction) ... Wholsale bitumen prices, fob basis (ARGUS report 04. ... One of the main problems for

2010 AEA CONFERENCE2010 AEA CONFERENCE

Stratford on Avon, October First, 2010

BITUMEN MARKETBITUMEN MARKET

Carlo GiavariniCarlo GiavariniSITEB SITEB –– Italian Asphalt and Road AssociationItalian Asphalt and Road Association

C.Giavarini _ Bitumen Market Stratford on Avon _ 2010

Bitumen properties & useBitumen properties & useA UNIQUE, VISCOELASTIC, INERT, STABLE MATERIALA UNIQUE, VISCOELASTIC, INERT, STABLE MATERIALmaintainingmaintaining itsits propertiesproperties over long timeover long time

100 % RECYCLABLE: 100 % RECYCLABLE: whenwhen usedused forfor pavementspavements itit isisnotnot consumedconsumed

VERSATILE: VERSATILE: manymany usesuses in in manymany formsforms ((asas suchsuch, , asasemulsionemulsion, , foamfoam, , blownblown, , modifiedmodified ……..)..)

TECHNOLOGIES TECHNOLOGIES basedbased on on bitumenbitumen ARE LESS ARE LESS EXPENSIVEEXPENSIVE

MostMost importantimportant areasareas of of applicationapplication are: are: PAVEMENTS (75 PAVEMENTS (75 –– 80%) AND MEMBRANES (15%)80%) AND MEMBRANES (15%)


Commercial Commercial RomanRoman asphaltasphalt samplesample ((ingotingot) ) withwith producerproducer’’s s stampstamp _ First _ First centurycentury

Aloni Cai F(ilii) Arn(iensis) Sagittae


ONCE A NATURAL PRODUCT, BITUMEN IS NOW ONCE A NATURAL PRODUCT, BITUMEN IS NOW PRODUCED IN OIL REFINERIES FROM PRODUCED IN OIL REFINERIES FROM

SUITABLE CRUDE OILSSUITABLE CRUDE OILS


How bitumen is produced How bitumen is produced

HEATER

ASPHALTENICCRUDE

ATMOSPHERIC DISTILLATION

VACUUM DISTILLATION

VISBREAKING & VACUUM

SOLVENT DEASPHALTING

VB BITUMEN

SD BITUMEN

AROMATIC OIL

TO UPGRADING PROCESSES

BITUMEN

FUEL OIL


Crude oil & Bitumen future availabilityCrude oil & Bitumen future availability

ProvenProven crude oil crude oil reservesreserves are more are more thanthan 40 40 timestimescurrentcurrent annualannual production production ((aboutabout 65% in Middle East)65% in Middle East)

HeavyHeavy crudescrudes representrepresent the the largestlargest portionportion of the of the reservesreserves and and yieldyield more more bitumenbitumen :10% on :10% on averageaverage

OnlyOnly 2% of crude production 2% of crude production isis nownow usedused forforbitumenbitumen productionproductionThere are bitumen reserves for more than 100 There are bitumen reserves for more than 100 years years ((currentcurrent demanddemand))

ManyMany crudescrudes forfor bitumenbitumen production come production come fromfromregionsregions suchsuch asas M.E. and Venezuela (M.E. and Venezuela (criticalcritical areasareas))


Crude Oil & Refining Industry worldwideCrude Oil & Refining Industry worldwide

In 2009 the demand of petroleum products is decreased by In 2009 the demand of petroleum products is decreased by 4.4% in 4.4% in OcseOcse countries and increased in non countries and increased in non OcseOcse (+2%).(+2%).Refining margins are now low or negative in Europe and USA, Refining margins are now low or negative in Europe and USA, causing refinery closures and run cuts.causing refinery closures and run cuts.New refining capacities are being created in Asia (mostly in New refining capacities are being created in Asia (mostly in India and China) and in the oilIndia and China) and in the oil-- producing countries. producing countries. Refining trend is towards deep conversion, reducing residues.Refining trend is towards deep conversion, reducing residues.Bitumen production and demand is decreasing in Europe.Bitumen production and demand is decreasing in Europe.Globally, bitumen demand is projected to increase, but Globally, bitumen demand is projected to increase, but production is not always located in major consumption areas.production is not always located in major consumption areas.As a consequence, bitumen demand, availability and value As a consequence, bitumen demand, availability and value are different in various parts of the word.are different in various parts of the word.


Bitumen growth prospects will vary widelyBitumen growth prospects will vary widely

IncreasingIncreasing demanddemand in in developingdeveloping countriescountries, , especiallyespecially China, India, East China, India, East EuropeEurope (new (new roadsroads constructionconstruction))StagnantStagnant or or decreasingdecreasing demanddemand in in manymanyindustrialisedindustrialised countriescountries (Usa, West (Usa, West EuropeEurope, , JapanJapan) ) (*)

West West EuropeEurope: : decreaseddecreased demanddemand despitedespite the the demanddemand of of infrastructuresinfrastructures ((economiceconomic crisiscrisis))

The demand is influenced by the increasing quantity of recycled asphaltmix (in Europe about 50 Mt/y, or 2,5 Mt/y of bitumen)

(*):


EUROPE 2008EUROPE 2008:: 2.9% drop in production of hot 2.9% drop in production of hot mix asphalt in the 29 Countries surveyed by EAPAmix asphalt in the 29 Countries surveyed by EAPA

Germany 51.0 Mt similar to 2007

France 42.3 Mt similar to 2007

Spain 42.2 Mt - 15%

Italy 31.6 Mt - 10%

Turkey 26.6 Mt + 20%

UK 25.0 Mt - 3%

((fromfrom 342.9 Mt in 2007 down 342.9 Mt in 2007 down toto 333.1 Mt in 2008)333.1 Mt in 2008)

Unofficial data 2009 show a much worse situation in many countries


EUROPE 2009EUROPE 2009:: further drop in production of hot further drop in production of hot mix asphalt in many countriesmix asphalt in many countries

Germany - 6

France - 3 -5%

Spain - 10

Italy - 8 -7%

Turkey

UK - 6 - 5


2009 vs 2010 2010 vs 2009 (prediction)

TarantoLivorno

VeneziaSannazzaro

Bayernoil

Schwedt

Litivinov

MAIN EUROPEAN BITUMEN PRODUCERS (MAIN EUROPEAN BITUMEN PRODUCERS (aboutabout 60 out of 114 60 out of 114 refineriesrefineries))

Pitesti

Ploiesti

Falconara

Augusta

Busalla

Mantova

Ingolstadt

Schwechat

Székesfehérvár

Petit Couronne

Reichstett

Antwerp

Nantes

Dunkerque

Paris

Lyon

Marseille

Trecate

Szazhalombatta

KiskunfelegyhazaZalaegerszeg

Pardubice

Bratislava

Leuna

Roma

Karlsruhe

GelsenkirchenPernis

Heide

Koln

Cadiz

Tarragona

Huelva CartagenaCastellon

A Coruña

SanturceAlzambuia

Valdemoro

PuertollanoSines

Oporto

GdanskPlock

Thessaloniki

Korintos

Asprogyrgos

Hamburg

Vissingen

Ravenna


Bitumen trading is changingBitumen trading is changingBitumen can now travel long distancesBitumen can now travel long distances

Global bitumen market needs improved long distance Global bitumen market needs improved long distance transportationtransportationSpecial containers are now available for solid bitumen Special containers are now available for solid bitumen transportation; heating is possible at the end of a journeytransportation; heating is possible at the end of a journeyBig bags are used for relatively hard bitumenBig bags are used for relatively hard bitumenMostly, special tankers (3.000Mostly, special tankers (3.000--6.000 tons, or more) can 6.000 tons, or more) can transport bitumen on the seatransport bitumen on the sea30 new ships will be ready shortly to increase the fleet of 30 new ships will be ready shortly to increase the fleet of more than 200 tankers now existing (60% in Asia)more than 200 tankers now existing (60% in Asia)Freight rates for a 3.500 cargo shipment from Ravenna to Freight rates for a 3.500 cargo shipment from Ravenna to Libya are around $ 55/tLibya are around $ 55/tNew storage capacities are created in coastal areasNew storage capacities are created in coastal areas


Refinery

TruckLoading

Railcars

Barge

Bitumentanker

Bitumenbags

Shipping Container

Tank farm

Mobile Asphalt Plant

Stationary Asphalt Plant

Roofing Plant

Binder Manufacturing


BitumenBitumen transportationtransportation in the in the MediterraneanMediterranean areaarea

ItIt isis one of the one of the fastestfastest developingdeveloping sectorssectors, , basedbased on the on the expansionexpansion of the of the roadsroads and highway and highway networksnetworks..

The The demanddemand of of bitumenbitumen and and otherother existingexisting productsproducts isisboomedboomed, , especiallyespecially in the in the MediterraneanMediterranean basinbasin wherewhereavailabilityavailability of of thesethese productsproducts forfor export export isis limitedlimited..

At the At the samesame time, time, mostmost NorthNorth Africa Africa countriescountries are pure are pure importersimporters of of thesethese productsproducts ((notnot toto mentionmention the the EastEast and and West West AfricanAfrican regionsregions).).

A A numbernumber of of smallsmall refineriesrefineries are are targetingtargeting bitumenbitumenproduction and/or production and/or changingchanging ownerowner..


11 11 RefineriesRefineries(out of 15) (out of 15) produce produce bitumenbitumenin Italyin Italy


2009 2008 2007 2006Total Production 3.662 3.643 3.592 3.762Internal Market (*) 2252 2.372 2.617 2.907Export (**) 1.410 1.271 984 878For traditional mix production 1.579 1.760 1.993For polymer modified mix 245 240 220For W.P. membrane 415 440 500Traditional Hot Mix production 31.580 35.200 39.860For emulsion and blown 150 168 171

(*) - 2010 (first quarter): minus 18%

(**) - Export increase 2008/2009: +11%

Bitumen production and use in Italy (Bitumen production and use in Italy (ktkt))


Italy. Bitumen production and consumption Italy. Bitumen production and consumption ((ktonkton))

Consumption 65%

Export 35%

2008

Consumption 61,5%Export 38,5%

2009


Production of HMA [Mt]

05

101520253035404550

Italy

270

280

290

300

310

320

330

340

350

Euro

pe

ItalyEurope

Italy 39,8 39,9 42,4 46 40,1 39,9 35,1 31,6

Europe 296,9 297,8 300,6 315,1 320,9 341,7 342,9 333,6

2001 2002 2003 2004 2005 2006 2007 2008


The Italian trend seems different respect to other European countries (for example France – GPB data)


Bitumen market value in a number of places Bitumen market value in a number of places (Argus, 7(Argus, 7--11 11 decdec. 2009). 2009)Reference: Italy = 100Reference: Italy = 100

lowlow highhigh

China (import)China (import) 131131 133133BahreinBahrein 143143 --

RotterdamRotterdam 139139 145145SpainSpain 165165 173173Texas Texas CoastCoast (USA)(USA) 106106 109109Washington Washington StSt. . (USA)(USA) 123123 129129SingaporeSingapore 137137 140140

ItalyItaly ((includingincluding taxtax)) 100100 101101C.Giavarini _ Bitumen Market Stratford on Avon _ 2010

Wholsale bitumen prices, fob basis (ARGUS report 04. 06. 2010)


BitumenBitumen market market valuevalue in Italyin Italy

One of the main problems for road contractors is the increase in value during the same year. This is common to other Countries

90100110120130140150160170180190200210220230240250260270280290300310320330340350360370380390400

Indice SITEB del prezzo medio del bitume stradale in ITALIA

(Indice SITEB 100 = prezzo bitume a genn. 1999)

SITEB INDEX100 = value of the bitumen in january 1999


GAP in infrastructuresmktold

mktnew

shiftvolumes

Balancing ofprices

Full scenario: pictureFull scenario: picture

Investments

Strong demand forinfrastructures

Reduction in bitumen quantity

Economicalcrisis

bitumen diesel fuel

Bitumen demand unsatisfied


THANK YOU FOR THE ATTENTION


See you in Padova for ASPHALTICA 2010 (22-24 November)

CONCLUSIONSCONCLUSIONS

RefiningRefining isis a a strategicstrategic industryindustry and and EuropeEurope cannotcannot acceptaccept totoprogressivelyprogressively looseloose itsits ““piecespieces””BitumenBitumen isis a a strategicstrategic material material asas wellwell. . HoweverHowever, , wewe shouldshouldnotnot forgetforget thatthat, , behondbehond certaincertain limits of limits of availabilityavailability and and costcost, , itit couldcould bebe replacedreplaced byby otherother materialsmaterialsA A betterbetter cohoperationcohoperation isis toto bebe hopedhoped betweenbetween bitumenbitumenproducersproducers and and usersusers, , toto analyseanalyse the the problemsproblems of of bitumenbitumenavailabilityavailability and and qualityquality in the in the innerinner market.market.The The usersusers shouldshould investinvest more more resourcesresources in in researchresearch and and innovationinnovation in in orderorder toto addadd valuevalue toto the the bituminousbituminous productsproductsThe buyer The buyer AdministrationsAdministrations shouldshould learnlearn howhow toto preferpreferqualityquality and and innovationinnovation more more thanthan low low pricesprices forfor the the worksworks


Documents

Bitumen market conferences - asphaltes.org¨s AIA 2010 - bitumen... · roads construction) ... Wholsale bitumen prices, fob basis (ARGUS report 04. ... One of the main problems for