China's bitumen imports dropped by 16.5pc on the year to 557,258t in January-February, pressured by a fall in shipments from major suppliers South Korea and Singapore.
Importers typically stockpile during the winter months of December-February and ahead of the lunar new year holiday when construction slows. But a combination of factors, including fluctuations in crude futures, a persistent lack of bitumen demand and a later-than-usual lunar new year holiday this year, led to a delay in bitumen stockpiling.
Bitumen demand this year is expected to be lower than in previous years as 2021 marks the start of China's 14th annual five-year plan, meaning there is no rush yet to meet construction targets set out in the plan. The Chinese government has also yet to release its fiscal budget for 2021. Road work projects from 2020 have been rolled over to this year, with brisk construction activities seen in southwest China, including Sichuan, Guizhou and Yunnan provinces.
South Korea and Singapore remained China's top two bitumen suppliers.
Imports from South Korea totalled 324,681t, down by 6.6pc from a year earlier. Imports from Singapore slipped by 20pc from a year earlier to 149,677t in January-February. This comes amid production cuts at ExxonMobil's Singapore-based bitumen unit since May 2020. The Singapore unit can produce about 100,000-200,000 t/month of bitumen.
Malaysia and Thailand were China's third- and fourth-largest suppliers, delivering 58,433t and 14,085t respectively.
China also exported 103,473t of bitumen during January-February, up by 11.8pc from the same period a year earlier. Vietnam, Australia and Malaysia were the three largest export destinations, taking 38,236t, 32,153t and 12,893t respectively.
Business operations and road developments continued at a steady pace across China before the 11-17 February lunar new year holiday, with prompt bitumen demand met by domestic supplies. Suppliers also drew on commercial inventories on a need-to basis.
Refineries usually cut prices during winter to boost sales and ease their inventory pressure. But domestic prices were flat during the winter period, with refineries pointing to sufficient inventory space. Firm prices during the two months hindered stockpiling purchases.
Chinese bitumen production totalled 4.7mn t during January-February, up by 135pc from a year earlier. State-controlled Sinopec and PetroChina had lowered their bitumen production last January, around the time the Covid-19 outbreak struck. Sinopec and PetroChina estimated their bitumen production was below 40pc of normal levels in the first quarter of 2020.