How variables affect the competency of countries to buy bitumen in the future? In other words, what items are dependant on the bitumen market, bitumen demand,
and desire of nations to buy bitumen? In this article, we will answer these questions. So, stay tuned.
Buy bitumen or buy polyethylene?
As we all know, polyethylene is one of the by-products of bitumen. Therefore, the demands of this petrochemical definitely affect the countries’ need to buy bitumen. Let’s see the relation in between. Respectively, many factors need to be considered,
including consumer interest, resources, and the completion of the packaging industry, which is the major customer of polyethylene. All of the above-mentioned items are dependant on GDP growth. Thus, GDP is inherently related to plastic consumption.Moreover, the main growth centers are in Asia,
mainly in China and India, as well as Central and South America, Eastern Europe, Africa and the Middle East.
As noted above, these continents have a high demand to buy bitumen,
in order to fulfill their need for polyethylene. It’s also worth mentioning that the United States,
Europe, and developed regions such as Japan are already economically saturated. Consequently, the growth of plastic demand in these areas will be low
and the consumption of polyethylene will be high. In fact, in developing countries,
consumption growth will be high and per capita consumption will be low. Besides, plastic demand will
increase in line with income and population growth.
According to reports, US per capita demand is 40 kg and will reach 45 kg by 2028. Rising environmental pressures,
rising recycling levels, the use of high-quality options and declining economic growth
will cause the US plastics market to decay further after 2028. We also will see a similar trend in Western Europe and developed
Asian countries such as Japan.Europe’s per capita consumption has increased from 20 to 22,
indicating growing consumption in Eastern and Central European countries, including Russia.
As the final point, Asia, especially India and China, have the strongest estimated rates of
consumption growth to buy bitumen and petrochemicals. India’s consumption will surpass that of China over the next decade, respectively.Besides, India’s polyethylene demand will grow 8.9 percent year on year compared to China. China’s annual growth will be 6%.
Global oil demand will reach pre-crisis levels in the next three years
In this section, we will browse some predictions on the future demand to buy bitumen and oil. We tend to see what items affect the bitumen market in the future. Analysts at Merrill Lynch Bank of the United States say that if the Corona vaccine is successful by the end of 2021,
air travel will increase by 75% in 2022 and 90% in 2023,
and oil demand will jump positively between 2021 and 2023.
Industrial analysts assume that it will take three years for global oil demand to buy bitumen,
to return to pre-Corona levels if the corona vaccine or treatment becomes available in 2021,
industry analysts say, citing the Gulf Times. In other words, analysts at Merrill Lynch Bank of the United States believe that if the corona vaccine is approved by
the end of 2021, air travel will increase by 75% in 2022 and 90% in 2023. In this case, oil demand from 2021 to 2023
will have a positive jump and come out of the worst of 2020.
Generally, global oil demand in the first half of 2020 was hit hardest by the Coronavirus
epidemic as road and air travel fell sharply during shutdowns around the world. Demand for 16 million barrels per day in the second quarter of this year decreased compared to the previous year. The drop in demand was five times
more severe than the decrease in demand in the fourth quarter of 2008 at the height of the global financial crisis.
How lockdown affect the demands to buy bitumen?
With the lifting of travel restrictions around the world,
demand is now gradually improving and workers are resuming their normal commuting.Respectively, road transport has almost completely recovered,
and US Bank analysts expect global demand for oil from road traffic to return to pre-Corona levels by the end of this year,
but air travel has not grown much.
“Air travel is down 50 percent from pre-crisis levels,”
said Peter Hells, commodity strategist at Merrill Lynch Bank. “We expect air travel to remain low until
effective treatment for Covid 19 appears.”
“Most experts expect it to take 12 to 18 months to develop a safe and effective vaccine,
and by then we will not see an increase in air travel,
demand for oil, buy bitumen and petrochemicals.”According to the latest oil market report, the International Energy Agency lowered its forecast for global oil demand to 140,000 barrels per day this year,
citing high levels of coronavirus and weak aviation.
The International Energy Agency has also joined the ranks of analysts who believe that the growth of
global oil demand to buy bitumen in recent weeks due to weak refinery profit margins,
lack of demand for aircraft fuel and the instability of global economic growth. Especially China, the world’s largest oil importer, has stalled.
Predictions on fuel, oil market, and bitumen
Kisuke Sadamori, director of energy markets and security at the International Energy Agency,
says that although the agency did not anticipate a significant drop in demand,
the global oil production surplus has not yet declined significantly.”Global reserves do not seem to have shrunk significantly,” he said, noting that refinery activities
have not increased much and that aircraft fuel is a major problem.
According to Sadamuri, instability in China’s economic recovery and oil demand will
affect the global oil market and the competency of countries to buy bitumen. Recently, the International Energy Agency expected global demand for crude oil this
year to be 8.1 million barrels per day less than in 2019.
It’s also important to know that OPEC also lowered its forecast for oil demand
in August as a result of declining fuel demand and
continued instability over the impact of the Corona epidemic on world economies and transportation.