Singapore, 22 September (Argus) — The government of Australia's second most populated state Victoria has mandated a two-week shutdown of the construction industry from 20 September in metropolitan Melbourne and other local government areas, which is expected to slow bitumen consumption in the near term.

An increasing number of cases connected to the sector coupled with concerns over weaker compliance with Covid-19 safety rules within the community, were key reasons cited for the shutdown. This decision by the government is meant to reduce movement and minimise further transmission.

Projects that are deemed as critical or essential will be allowed to continue, which includes road construction works, while building projects are expected to face the brunt of the shutdown. The shutdown in Melbourne as well as the city of Ballarat, city of Greater Geelong, Surf Coast Shire and Mitchell Shire comes as Australia enters its spring road paving season with bitumen demand anticipated to strengthen in the coming months.

Roadworks have been occurring at a steady pace amid lockdown measures in Victoria prior to the current sector-wide shutdown. Bitumen demand from road contractors and consumers is expected to slow over the next two weeks. Upon the end of the shutdown, construction sites will have to demonstrate compliance with Covid-19 safety rules and workers will need to have received at least one dose of Covid-19 vaccination before work can resume on 5 October.

The government announced last week that construction workers would have to show evidence of inoculation with at least one dose of the vaccine by 11.59pm Australian Eastern Standard time (13:59 GMT) on 23 September in order to be allowed to work. This decision and the announcement of shutdown of projects have sparked protests from the sector, with demonstrations taking place in Melbourne since 20 September.

The protests have entered its third day, even as north-eastern Victoria experienced a 5.8 magnitude earthquake early on 22 September. Tremors were felt across the state as well as New South Wales, Canberra and as far as Adelaide. This is the strongest earthquake reported in Victoria, possibly in the last 200 years. Damage has been limited to buildings and not roads, with no immediate reports of deaths. The state remains on alert for potential aftershocks. Oil product supplies from the two refineries in the area, Viva Energy's 128,000 b/d Geelong and ExxonMobil's 90,000 b/d Altona plants, have not been affected, the companies said.

The sector shutdown and protests have cast some uncertainty over bitumen demand in Victoria in the coming weeks. Most importers have already concluded buying for October-loading volumes.

Australia imported about 902,317t of bitumen in the latest July 2020-June 2021 fiscal year, 6.9pc more on the year, according to data from the Australian Petroleum Institute. Victoria typically accounts for 22-25pc of Australia's total bitumen consumption.

By Regina Koh

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