Limited funding curb Australia's 1H bitumen imports

Australia's bitumen imports in this year's first half fell by 20pc against a year earlier, as state councils cut road construction budgets in the 2023-24 fiscal year ending 30 June.

The country imported 385,207t of bitumen during January-June, down from 481,841t a year earlier, according to data from Australia Petroleum Statistics.

Most states were still feeling the economic impact of the Covid-19 pandemic, with funds reallocated to healthcare and supporting businesses instead of road construction and maintenance, bitumen market participants said. They are expecting a 25pc fall in revenues compared with before the pandemic.

The Australian government is still paying off debt from the pandemic, while having to also set aside funding for projects such as a large-scale rail venture. The project, which aims to make Australian cities more interconnected, will cost at least $125bn, some bitumen importers told Argus.

Further weighing on Australian consumption was a harsher than usual winter that hampered any road construction activity. Meteorological data show more cold snaps across southeast Australia and extreme weather events like heavy snow and hailstorms close to main cities. This brought snow as far north as the New South Wales and Queensland border during winter. Parts of Victoria and Tasmania also experienced floods.

But market participants are cautiously optimistic about post-winter consumption, as damage to roads is likely to be more severe than usual because of the harsh winter conditions. This should support post-winter demand, although limited budget and major renovation work at Geelong Port in Victoria may hinder imports, market participants noted. They forecast bitumen imports in this year's second half to be similar to the same period in 2023 at about 450,445t, or at most down by 5pc from a year earlier.

By Chloe Choo