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China Continues Asphalt Bitumen Imports Through Canadian Oil Sands

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Shandong, China – Asphalt Bitumen continues to be a work around import in China. S&P Global reports Canadian “oil sands” are now a goto option of import to China. Sources from S&P state in August, Canadian oil sands were made available to independent refiners in order to economize on taxes and quotas.

-Oil sands are imported as natural bitumen, asphalt, and other products.

According to SP, Canadian oil sands arrived in China in August for private refineries in the Shandong province, where they will serve as a more cost-effective feedstock for asphalt production than crude oil or bitumen blends, according to a report on Sept. 6.

On August 22, the oil tanker Baroness arrived in Shandong’s Dongjiakou Port with an 83,000 metric ton cargo that had been loaded at Canada’s Westridge Port. According to shipping fixtures and data intelligence provider Kpler, the cargo was loaded from Westridge Port in Canada.

According to sources with knowledge of the situation, the oil sands shipment was imported as natural bitumen and asphalt, rather than the typical categories of crude oil or bitumen blend.

Natural bitumen and asphalt imports for independent refineries do not require the use of import quotas, in contrast to crude oil imports. They are also exempt from consumption tax, whereas bitumen blend is subject to a consumption tax of Yuan 1,218/mt prior to the imposition of value added tax.

Reporting oil sands as natural bitumen and asphalt helps to save both crude import quota and consumption tax, Additionally, according to Platts data released on September 6, 880,000 mt of bitumen blend was discharged into Shandong ports in August, representing a 226 percent increase from the 14-month low of 270,000 mt in July.

August were significantly lower than the historical high of 2.64 million mt in May, which was a result of the implementation of a high consumption tax on June 12.

Despite the fact that the market for bitumen mix has increased slightly due to the recent buying binge of crude feedstocks for November arrivals, the demand for product asphalt remains sluggish.

The majority of the bitumen blend was imported by trading companies, who anticipated that independent refineries would return to these feedstock after their crude permits were exhausted. Furthermore, when the shipments were carried into Shandong waters, the vast majority of them had no confirmed purchasers.

In addition to the cargoes that were discharged, there was approximately 1.28 million mt of bitumen blend in nine cargoes that were still waiting beyond the port’s boundaries to be discharged until September.

It is mainly crude cargoes from Malaysian waters that are blended with heavy crude grades, which have primarily been Venezuelan Merey in recent years.

Some of the Merey crude cargoes have been re-labeled as Nemina crudes or Malaysian Blend as a result of the consumption tax, while others have been re-labeled as bitumen blend as a result of a crude import quota deficit.

Asphalt Mixtures are mostly imported into the United States from:

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-Canada ($86 million), Belgium ($3.67 million), South Korea ($3.22 million), Italy ($2.1 million), and Malaysia ($2.01 million).

-Belgium ($3.53 million), South Korea ($2.48 million), and Italy ($2.09 million) were the fastest increasing import markets for Asphalt Mixtures in the United States between 2018 and 2019.

The total value of Bitumen and Asphalt (Natural), Bituminous or Oil Shale, and Tar Sands imported into the United States from China in 2020 was US$52.1 Thousand.

Bitumen and asphalt, shale, and tar sands imports into the United States totaled $9.59 million in July, representing a decrease of 45.20 percent from the same month the previous year which is increasignly worrisome while the recent storms and reliance on domestic issues seen in Colorado.

A decrease of -63.80 percent compared to one month prior was observed.

Bitumen and asphalt, shale, and tar sands were placed No. 793 in July among more than 1,260 commodity classifications, according to the USDA.

It had been ranked 651 during the same month the previous year.

While bitumen and asphalt, shale, and tar sands were rated 793rd in terms of value in July, they were placed 417th in terms of tonnage.

For Bitumen and Asphalt, Shale and Tar Sands imports into the United States in July, the top three markets by value were (in descending order): Canada (first), Colombia (second), and Norway (third).

The top three most valuable items shipped through the nation’s more than 450 airports, seaports, and border crossings were (1) passenger vehicles, (2) oil, and (3) computers, in that order.

Wholesale Spot Petroleum Prices from Refinitiv, Retail Petroleum Prices from AAA Fuel Gauge Report, Prompt-Month Energy Futures from CME Group, and Select Spot Prices from SNL Energy.

Wholesale Spot Petroleum Prices, 9/16/21 Close
ProductAreaPricePercent
Change*
Crude Oil
($/barrel)
WTI72.69+0.1
Brent75.14+0.4
Louisiana Light73.49-0.5
Gasoline (RBOB)
($/gallon)
NY Harbor2.26-0.2
Gulf Coast2.14-2.0
Los Angeles2.13-1.1
Heating Oil
($/gallon)
NY Harbor2.05+0.3
Gulf Coast1.95+0.4
3:2:1 Crack Spread
($/barrel)
Gulf Coast (LLS)16.88-4.1
Low-Sulfur Diesel
($/gallon)
NY Harbor2.21+0.3
Gulf Coast2.17+0.3
Los Angeles2.24+0.3
Propane
($/gallon)
Mont Belvieu, TX1.33+1.9
Retail Petroleum Prices (AAA), 9/16/21 ($/gallon)
Regular GasolineU.S. Average3.19+0.1
DieselU.S. Average3.300.0
Prompt-Month Energy Futures, 9/16/21 Settlement
ProductPricePercent
Change*
VolumePrior Day
Open Interest
Crude Oil ($/barrel) – Nymex Oct72.610.0315171
Gasoline-RBOB ($/gallon) – Nymex Oct2.18-1.26386
Heating Oil ($/gallon) – Nymex Oct2.21+0.35184
Natural Gas ($/million Btu) – Nymex Oct5.34-2.3230145
Coal ($/ton) – NymexNANANANA
Ethanol ($/gallon) – CBOTNANANANA

Notes for Prompt-Month Energy Futures

Select Spot Prices for Delivery Today
RegionNatural Gas
($/million Btu)
Electricity
($/MWh)
Spark
Spread

($/MWh)
PricePercent
Change*
PricePercent
Change*
New England5.16-5.662.38-4.726.24
New York City5.09-1.866.990.031.36
Mid-Atlantic5.10-1.772.02+4.536.34
Midwest5.26-3.360.83-11.723.99
Louisiana5.52-2.550.75+10.312.12
Houston5.60+1.671.00+22.931.80
Southwest5.02-6.351.50-10.716.34
Southern CA7.14+1.763.21-0.313.26
Northern CA7.12-4.064.07-1.914.25
Northwest5.43-2.165.00-21.027.00

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