In the first half of 2011, China produced 7.76-mil mt of bitumen altogether, tad up by 2.3% year on year, C1's statistics showed.
Particularly, total output by the top ten domestic bitumen producers represented 55.8% of China's aggregate bitumen output in H1'2011, lifting by 3.6% compared to H1’2010, C1's data indicated.
However, this 2.3% year on year growth in bitumen output is notably smaller than C1's previously predicted 7.5% rise made at the beginning of the year. This is mainly because of tightening of credit policy by the government which significantly impacted funding for road constructions, which in turn weighed down domestic bitumen output, market sources expressed.
Additionally, since bitumen production margin during H1'2011 is much lower than same period last year, this impacted independent refineries' production enthusiasm. As a result, independent refineries only contributed 15.67% of the nation's total bitumen output, which is much lower than the 21% they represented during first half of 2010, C1's data further showed.
In the second half of 2011, the government will probably maintain its tight credit policy and thus funding for road projects will remain fairly stiff. Consequently, exuberant bitumen demand probably won't be released and overall demand for 2011 may be lower than previously expected, analysts opined.
Nevertheless, some road projects which are pushed back from H1'2011 will release demand at the end of the year. This together with likely improvements in funding conditions in Q4'2011 means domestic bitumen output should continue growing in 2011, but the year on year growth rate may only reach 3-4%, C1 predicted.
