Iran Bitumen Prices November 22
Bitumen prices in Iran take a turn for the worst
Raw material to produce high quality bitumen in Iran increased bitumen prices 67.00 USD/MT in the stock exchange.
Let us examine some of the causes:
One of the reasons bitumen prices in Iran have increased is due to the increasing crude oil prices. Another factor bitumen prices in Iran have acended is the Government’s new policy for its new exchange rate against the USD. In the past 5 years or so Iran’s currency has lost nearly 400 % value against the USD. The Government in aims to control inflation on imported goods had provided certain products such as food and medicine a more affordable exchange rate. It also provided certain other less crucial imported needs of the nation a more affordable exchange rate. The government rate had always been less than that of the free market. Overall there was a decent gap between the Government’s exchange rates and that of the free market. With that virtually out of the way now the Government has decided to close the gap and increase it’s exchange rate to that of the free market. This new policy will impact nearly all aspects of Iran’s imported and exported product rates. Presently there will be a minimum of 10% difference in the value of purchasing or converting Government USD to that of the free market. For example, when in the past we bought bitumen or raw feed we paid the government in USD based on the exchange rates implemented by the government. Therefore by using this advantage we were able to discount our bitumen prices for consumers. This is because we sold bitumen at the free market exchange rates but paid the government a lower exchange rate. But now we cannot provide this incentive and pass it onto our customers and we will look towards our officials to balance the scales and bring Irab bitumen prices within a more affordable range.
Will there be a reverse in Iran bitumen price policy?
in the pastwhen such an event occurred the Government lowered the prices of Vacuum Bottom VB the raw material needed to produce bitumen which brought back bitumen prices to a managable and predictable price range. If Iran’s bitumen industry would like to compete in the international market which we are certain it does it will create the necessary balance.With that said, Iran’s prices for bitumen is one of the most affordable bitumen available in the market.