Bitumen prices jump amid  increased construction work

The price of bitumen increased by Tk1,500 per drum at the factory level during the last month.

The price has gone up due to increased construction work in the dry season and resumption of work on different development projects despite the novel coronavirus pandemic.

According to traders, the price of bitumen imported from Iran increased the most in the last month. At present, Iranian bitumen, 80-100 grade, is being sold at a wholesale price of Tk6,700 per drum. 

Its price was less than Tk5,000 at the end of November. This means the wholesale price of Iranian bitumen has increased by Tk1,600 per drum in one month.

It is learnt that till the end of November, 60-70 grade bitumen produced in private factories was sold at Tk6,000 per drum, which is now being sold at Tk7,000. 

Among the private companies, bitumen produced by PHP Group has a good market, said traders in the sector.

Despite the price hike of imported bitumen, the price of bitumen produced in Eastern Refinery under Bangladesh Petroleum Corporation (BPC) remained stable despite its increased demand. At present, refined bitumen is being sold at Eastern Refinery for Tk6,300. It has been sold at this price for a long time.

However, government-employed contractors, who are supposed to buy bitumen from the factory on the basis of demand, complained that they had to procure bitumen at a higher price than the fixed price. 

They said, "Although the fixed price is Tk6,300, we have to pay an additional Tk1,000-Tk1,500 to Eastern Refinery to get the product on time."

Mohammad Hasan, Owner of Chattogram-based bitumen importer Hasan and Brothers, said, "The sale of bitumen decreased significantly after construction of roads came to a standstill in March, all over the country, due to the shutdown imposed by the government to stem the spread of the [novel] coronavirus."

"We counted losses for the already imported bitumen at that time. Later, during October, demand for bitumen started increasing after construction work resumed and gained momentum. As a result, the bitumen price also increased during the last month," he continued.

"The price increase helped importers make up the losses inflicted by the [novel] coronavirus pandemic," he added.

Bitumen sold by state-owned BPC is produced in the factory of Eastern Refinery established in Chattogram. Bitumen produced by Eastern Refinery from imported raw materials is much better in quality than the bitumen produced by any private company of the country.

Bitumen traders said 80-100 grade imported bitumen was mostly  used for construction work in the country. But government agencies – including the Roads and Highways Department – banned the use of such bitumen imported from Iran, because roads constructed using it deteriorate in a short time. 

As a result, the use of 80-100 grade bitumen has decreased in the last few years. But, over the past year, use of Iranian bitumen has increased again. Since construction work gained momentum after the withdrawal of 

the shutdown, demand for imported and private factory-refined bitumen has increased a lot – due to scarcity of Eastern Refinery's bitumen on the market.

SM Kamruzzaman, a bitumen trader from Chattogram and owner of Msr Zaman Enterprise, told The Business Standard, "In the last month, the wholesale price of imported and refined bitumen has increased by Tk700-Tk1,700 per drum. The price per drum Iranian bitumen has increased by Tk1,500-1,700. The price of refined bitumen has been increased by Tk700 per drum at the factory level." 

He said importers and private companies upped the prices of their products as demand for bitumen has soared amid increased construction work during the dry season.

"BPC's bitumen produced at Eastern Refinery is usually allotted to government-employed contractors while bitumen produced at private factories and imported from Iran is marketed and sold outside," he added.