Bitumen in China

1
Historical growth and trend for Bitumen in China
Over the years Chinas domestic production has risen to provide most of the local demand.
It remains a key importer of cargo, though imports remain around 400,000 MT P
Demand from road projects will warm up in 2013-2015. This is the last three years to
accomplish the infrastructure construction targets set in the Twelfth Five-Year
Plan (2011-2015), so many provincial governments will make a nal dash in the road
construction.
A Futures Contract has just been launched in Shanghai for Bitumen Futures that has proved
very popular as a lead in to crude futures in the SHFE, expected in the next 6 months.
Current Suppliers of Bitumen into China
Bitumen in China
2
South Korea makes up by far the largest supplier. SK Energy is the largest of the
suppliers.
Note that the importers are all in the Asia region, as freight rates make it
competitive. For the China market it becomes highly freight dependant for
bitumen to trade.
Possibly cargo is moved via Singapore.
I am aware that there are Iran origin cargoes moving to Southern Ports such
as Fangcheng Port on the China / Vietnam border. We have strong senior
relationships that manage the customs authority at this port.
Current China Pricing and Import Duties
The prices below are approximate as of Monday, 04 November, 2013 and
based from the FOB Bandar Abbas rate publicly available, obviously this would
be the changeable rate.
Bitumen in China
3
The prices are offer prices listed on the open market in China.
FOB Bandar Abbas
530
South China
60/70 Cargo
Frieght
Diff
Fangcheng 605 75
Shenzhen 600 70
Shanghai 595 65
North China
Tianjin 605 75
Qingdao 600 70
Import Duties for China
China is subject to a number of different duties and taxes for Bitumen:
1) Import Tax @ 8% / (HS Code: 271490)
2) VAT 17%
Note that VAT is calculated on the Post import price.
The table below is with unconrmed inputs on pricing and is just an example.
RMB USD 6.10
60/70 FOB Bandar
Abbas
3233 530
60/70 in China
(Shanghai)
4623 758
Duties
CFR Qingdao
(USD)
3660 600
Customs Duty
8%
Sub Total
3953 648
Bitumen in China
4
VAT @ 17%
672 110
Total Cost of
Cargo in China
4625 758
Pending Deal: 2k + 4k 60/70 Bitumen CFR Qingdao, China
The RED highlight in the rst table is for the current shipment request for trial
shipment as rst proposed trade as follows:
Cargo: 60/70 Bitumen
Vol: 2,000 MT
Packing: New Steel Drums, containerised
Origin: Iran
Payment: TBD
Disport: Qingdao, China
Delivery: ASAP
Notes: First part of a term contract of 4,000 MT per month for 6-12 months using
a formula and reference price for the term of the contract.