Bitumen Futures Contract Specs
Last updated: 2026-10-01
Bitumen Futures Contract Specs
The bitumen futures contract is a standardized derivative that trades in lots of 10 metric tons on the Shanghai Futures Exchange (SHFE), quoted in yuan (RMB) per ton with a minimum price fluctuation of 1 RMB/ton. The front-month contract typically settles at a 3–8% discount to spot cargoes in Singapore and South Korea, making it the most liquid paper benchmark for Asian bitumen pricing. Trading hours run 21:00–02:30 and 09:00–15:00 Beijing time, with the most active months being June, September, and December.
What Is a Bitumen Futures Contract?
A bitumen futures contract is a legally binding agreement to buy or sell a fixed quantity of penetration-grade bitumen (typically 60/70 or 80/100) at a predetermined price on a specified future delivery date. The contract is standardized by the exchange, meaning grade, tonnage, delivery location, and quality tolerances are fixed — only the price is negotiated in the market.
For exporters, importers, and traders, bitumen futures serve three core functions:
- Price discovery — the futures curve signals where the physical market is heading 1–6 months out
- Hedging — locking in margins against volatile crude-linked pricing
- Speculation — capturing moves without taking physical delivery
Unlike crude oil or fuel oil, bitumen futures are relatively young. The SHFE launched its bitumen contract in October 2013, and it has since become the reference price for Chinese imports and increasingly for Southeast Asian trade flows.
| Specification | SHFE Bitumen (BU) | MCX Bitumen (India) |
|---|---|---|
| Contract size | 10 tons/lot | 1 ton/lot |
| Price quote | RMB/ton | INR per barrel |
| Minimum tick | 1 RMB/ton | 1 INR |
| Trading months | All 12 months | Monthly |
| Settlement | Physical delivery | Cash-settled |
| Last trading day | 15th of delivery month | 15th of prior month |
| Margin requirement | 8–12% | 5–10% |
| Daily price limit | ±7% (expandable) | ±4% |
| Delivery grade | 60/70 penetration | Various |
The SHFE contract dominates volume. In a typical month, BU front-month contracts turn over 2–4 million lots — equivalent to 20–40 million tons of notional bitumen, roughly 10x the actual physical trade in Asia.
Price Mechanics and Margin Requirements
Bitumen futures prices are anchored to two things: crude oil (specifically heavy sour grades like Iranian, Venezuelan, or Middle Eastern barrels) and seasonal demand from road construction.
The correlation with Brent crude runs between 0.65 and 0.80 on a rolling 90-day basis — high, but not perfect. This spread exists because bitumen is a residual product from refinery coking and vacuum distillation, so its supply depends on refinery economics, not just crude price.
| Item | Value |
|---|---|
| Contract value (at 3,600 RMB/ton) | 36,000 RMB |
| Exchange margin (8%) | 2,880 RMB |
| Broker margin (typically 10–12%) | 3,600–4,320 RMB |
| Effective leverage | 8–12x |
| Daily mark-to-market | Yes, cash settled daily |
| Position limits (non-member) | 500–2,000 lots depending on month |
Example: A trader buying one lot at 3,600 RMB/ton with 10% margin posts 3,600 RMB. A 5% price move (180 RMB/ton) produces a 1,800 RMB gain or loss — a 50% return on margin in either direction. This is why risk management is non-negotiable.
| Period | Average Daily Range | Annualized Volatility |
|---|---|---|
| Low season (Nov–Feb) | 0.8–1.2% | 18–22% |
| Peak season (Apr–Sep) | 1.5–2.5% | 28–38% |
| Crude shock events | 3–7% | 45%+ |
Peak road-construction season in China (April to September) coincides with the highest volatility, as inventories draw down and weather disruptions hit supply.
Bitumen Futures vs. Other Energy Contracts
Traders often compare bitumen futures to fuel oil, crude, and asphalt-adjacent products. The differences matter for hedging strategy.
| Feature | Bitumen (BU) | Fuel Oil (FU) | Brent Crude |
|---|---|---|---|
| Contract size | 10 tons | 10 tons | 1,000 bbl |
| Primary use | Road paving | Marine fuel | Refining |
| Crude correlation | 0.65–0.80 | 0.85–0.92 | 1.00 |
| Seasonality | Strong | Moderate | Weak |
| Delivery | Physical, warehouse | Physical, warehouse | Cash/ICE |
| Liquidity | High (Asia) | High | Very high (global) |
| Typical spread vs. Brent | -$10 to -$25/bbl equiv | -$5 to -$15/bbl | — |
Key takeaway: Bitumen futures offer pure exposure to the heavy-end of the barrel with strong seasonal signals — but they are less liquid than crude during Asian night sessions. Traders hedging physical cargoes usually need 1.5–2.5 lots per 1,000 tons to cover basis risk, not a 1:1 ratio.
How Are Bitumen Futures Used in Physical Trade?
Physical bitumen exporters — particularly from Iran, South Korea, Singapore, and the UAE — use futures in three practical ways.
A Chinese importer buying 5,000 tons of 60/70 bitumen for arrival in 60 days faces price risk. By shorting 500 lots (at 10 tons each) on SHFE, the importer locks the margin. If spot prices fall 5%, the futures gain offsets the physical loss — assuming basis holds within ±2%.
Korean and Singaporean refiners increasingly quote FOB prices as:
FOB Price = SHFE Front-Month − Logistics Discount
Typical discounts run $15–$35/ton depending on port, grade, and freight — replacing the older Singapore spot assessment as the primary reference.
Sharp spreads between SHFE and MCX (India) or between Shanghai and Singapore physical open arbitrage windows of $8–$20/ton for traders with shipping capacity. These windows usually last 5–15 days before the market corrects.
| Strategy | Typical Participant | Holding Period | Target Return |
|---|---|---|---|
| Import hedge | Refiners, traders | 30–90 days | Margin lock |
| Export pricing | Korean/Singapore refiners | Contract-based | Basis capture |
| Regional arbitrage | Trading houses | 5–15 days | $8–$20/ton |
| Speculation | Funds, prop desks | Hours–weeks | Directional |
Key Risks and Settlement Considerations
Every bitumen futures position carries specific risks that physical traders must weigh before entering.
- Basis risk — the gap between futures and physical can widen by 3–6% during delivery squeezes
- Margin calls — daily mark-to-market means a 7% adverse move (the limit-down) can trigger a 70% margin call
- Delivery obligations — holding into the last trading day (the 15th) forces physical settlement against warehouse receipts
- Liquidity risk — far-month contracts (6+ months out) may trade only 5–10% of front-month volume
- Currency risk — RMB-denominated contracts expose USD-based traders to FX swings of 2–4% annually
Practical rule: Most hedgers roll positions 5–10 trading days before the 15th to avoid delivery mechanics entirely. Speculators should never hold into the delivery month unless they intend to take or make physical delivery.
| Date | Event |
|---|---|
| 1st of delivery month | Position limits tighten to 500 lots |
| 15th | Last trading day |
| Day 16–20 | Delivery matching and warehouse receipt transfer |
| Day 21–25 | Final settlement and payment |
FAQ: Bitumen Futures Contract
What is the contract size of a bitumen futures contract?
The SHFE bitumen futures contract trades in lots of 10 metric tons, quoted in RMB per ton with a 1 RMB/ton minimum tick. This makes one lot worth approximately 36,000 RMB at a price of 3,600 RMB/ton.
When does the bitumen futures contract expire?
The last trading day is the 15th calendar day of the delivery month, and most traders roll positions 5–10 days before that date to avoid physical delivery. Position limits also tighten to 500 lots at the start of the delivery month.
What is the margin requirement for bitumen futures?
Exchange margin runs 8%, with brokers adding 2–4% for a total of 10–12%, giving effective leverage of 8–12x. A 5% price move against a fully margined position equals a 50% loss on posted capital.
Can I take physical delivery of bitumen futures?
Yes — SHFE bitumen is a physically settled contract requiring 60/70 penetration grade delivered to registered warehouses in China. Most traders, however, close positions before the 15th to avoid the delivery and quality-verification process.
How liquid are bitumen futures compared to crude oil?
SHFE bitumen turns over 2–4 million lots monthly in the front month, roughly 10x Asian physical trade, but far-month liquidity drops to 5–10% of that. Brent crude remains 20–30x more liquid in dollar terms, so bitumen hedges should be sized carefully.
Calculate Your Bitumen Futures Hedge Cost
Before you place a single lot, you need to know exactly what your hedge will cost in margin, fees, and rollover. The 6Tar cost calculator lets you model contract size, margin rate, price moves, and settlement timing — then compare the results against your physical cargo economics. Whether you're hedging a 5,000-ton import or pricing an FOB export from Singapore, running the numbers first is the difference between a locked margin and an uncovered loss.