Factors Affecting Bitumen Prices
The price of bitumen in Iran is affected by various factors. The main basis for this calculation is the vacuum bitumen rate, which is determined as the raw material for bitumen production through the commodity exchange. This rate is usually announced twice a week and is used as a base index in calculating bitumen prices. Given that bitumen is considered an oil derivative, oil price fluctuations can be mentioned as one of the factors affecting bitumen prices. Vacuum bitumen is the main ingredient in bitumen, the price of which will be affected by the price of oil, which is why we can say that the price of oil and bitumen are closely related.
In addition, the exchange rate, transportation costs, type of packaging (bulk or barrel), type of bitumen grade such as 60/70 or 85/25 bitumen price, as well as the level of demand in the domestic or foreign market, definitely play an important role in the final price of bitumen. At the same time, the grade and quality of bitumen also have a direct effect on the price. For example, bitumens with a lower penetration degree, such as 30/40 bitumen, which are harder, are used in tropical regions and usually have a higher price.
Effect of vacuum bitumen rate on domestic and export bitumen rates
More than 95 percent of the price of bitumen is the price of vacuum bitumen as a raw material for bitumen production. This material, which is extracted from the vacuum tower of refineries, is used as the main feedstock for bitumen production, and the price of this material directly determines the base price of bitumen on the stock exchange. Vacuum bitumen is offered by refineries on the commodity exchange at a price set by the Oil Refining Industry Association, which consists of the country’s refineries. Therefore, when vacuum bitumen is purchased at high rates, the cost price of bitumen increases and, as a result, the selling price increases in the same proportion.
The role of currency fluctuations in determining the final price of Iranian bitumen
The exchange rate, especially the dollar, is another effective factor in determining the value of bitumen in Iran. Given that bitumen exports are based on dollars and other foreign currencies, any fluctuation in the exchange rate can directly affect the export and domestic bitumen prices.
Secondary factors affecting the price of exported bitumen:
Production and packaging costs, type of packaging and export standards, changes in customs tariffs, and international transportation costs are also factors affecting the price of bitumen.
The world price of oil and its connection with the price of exported bitumen:
The price of exported bitumen is directly related to the world price of oil, because bitumen is a by-product of crude oil refining; therefore, any increase or decrease in the price of oil affects the price of bitumen in the same proportion. Grades such as 60/70 bitumen and 85/100 bitumen prices, which are considered the most widely used export grades, are often adjusted to the global oil price.
