FOB Singapore bitumen prices climb to five-month high amid tight supply

FOB Singapore bitumen outright prices surged to a five-month high on Sept. 11 as production levels in Singapore struggled to keep pace with demand.

Platts, part of S&P Global Energy, assessed FOB Singapore PEN 60-70 at $660/mt on Sept. 11, the highest level since April, when prices surged at the onset of the US-Iran conflict.

Market participants expect regional prices to move higher if supply constraints persist, with some seeing FOB Singapore potentially reaching $700/mt again.

Supply of Singapore-origin bitumen has become constrained as refineries are unable to secure sufficient suitable heavy crude, while specification issues have also reduced the amount of material available to the spot market, trade sources said.

One refinery has had no visible bitumen supply so far in 2026, while another has been affected by feedstock shortages and specification problems, trade sources said.

A third refinery has continued to produce intermittently, although recent output was reportedly off-spec and withdrawn from the market, according to three trade sources.

"All [refineries] similar ... everyone is adjusting feedstock to manage, but not working well," a bitumen trader based in Singapore said.

The refinery producing intermittently, has been heard to produce around 30,000-40,000 mt/month, although most volumes are committed under term contracts, the trade sources said.

Market participants said they had seen little to no material from one major Singapore refinery in the spot market for several months.

Supply concerns amplified

Supply availability elsewhere in Asia has also tightened.

South Korean producers are facing similar heavy-crude constraints, with the country recently turning to Chinese imports, the trade sources said.

"Chinese cargoes are helping to keep the region wet at the moment," a bitumen trader at a major trading house based in Singapore said.

The tightening supply comes as seasonal demand in September so far remains firm.

Australian demand has been strong throughout the year, with peak season approaching, while demand in Singapore remains steady amid ongoing infrastructure projects.

Buyers are increasingly willing to accept higher prices as cargo availability deteriorates, with some end users able to absorb prices in the $700-$800/mt range, the trade sources said.

Market participants pointed to Indian buyers taking more Iraqi material despite its lower quality, highlighting how much of a priority securing supply has become.

"Logistics are the main concern; cargoes are available from the Middle East, but getting them has been a major challenge for both buyer and seller," a director of a bitumen trading company based in Singapore said.

"It was expected that things would be normal by the time peak season hits ...the importers that I deal with themselves are busy finding shipping lines that can offer them a secure passage to India," an importer based in Kolkata said.

The impact of the supply constraints is reflected in Singapore's export data.

Bitumen exports fell 62.5% year-over-year to 430,511 mt in the April-August period, according to Enterprise Singapore data. August exports totaled just 68,358 mt, down 69.7% from 225,930 mt a year earlier, following a fall of 61.6% in July, 70.4% in June and 73.1% in May. April exports fell a comparatively smaller 38.6% year-over-year to 135,196 mt.

A rapid recovery in supply appears unlikely, with heavy crude availability and geopolitical disruptions expected to continue to constrain regional production. trade sources said.

Fuel oil complex

The constraints are largely feedstock-driven, with Singapore refineries relying on Canadian crude and occasional Middle Eastern barrels, neither of which has been sufficient to sustain higher bitumen production, trade sources said.

Even when bitumen cracks are attractive, refiners may favor fuel oil because the same feedstock can generate substantially greater fuel oil volumes than bitumen, limiting the incentive to maximize bitumen output, trade sources said.

The cash differential for the benchmark 380 CST grade has jumped to its highest premium in more than five months amid competitive buying interests in the physical market.

Although the HSFO refining margins remain quite strong amid limited availability, market sources expect feedstock demand for the residual fuel oil to likely increase in the coming weeks as regional refiners struggle to procure their usual crudes.

Platts assessed the front-month Singapore 380 CST HSFO crack against prompt-month Brent crude at minus $2.47/b Sept. 11, up from minus $3.67/b on Sept. 10. The HSFO refining margin posted a weekly gain of 53.7%, Platts data showed. The front-month Singapore 380 CST HSFO crack against Brent was pegged further stringer at minus $1.80/b in midafternoon trade Sept. 14.