New YorkThe US wholesale asphalt price range widened dramatically last week with numbers heard in the $115-198 fob range, depending on the market. The lowest prices continued to be in the Rocky Mountain region, where prices were heard in the $115-125 range, with some numbers as high as $130. In the Midwest, the wholesale range widened to $130-165 fob, with the upper end applying to volumes moving to the Gulf coast market. In the Gulf coast, prices in the eastern section where at around $168 fob, while western Gulf coast transactions were slightly lower at $165 fob. In the east coast, one refiner had raised its quotes for PG 64-22 to the upper $190s on a fob basis.
East
coast commentary
One East
coast refiner reported selling a barge for a premium grade at over $200 fob.
The supplier stated that this was based off a price of PG 64-22 that was in the
upper $190s on a fob basis.
One East coast refiner reported that it does not have any wholesale asphalt to offer in the market this year, as the tighter East coast market has provided it with opportunities to sell more retail asphalt.
Last week was a very slow week in terms of asphalt liftings. Asphalt marketers cited several reasons for slow activity. Rainfall and the long 4th of July weekend were key reasons cited. Additionally, the change in local governments fiscal year (which starts in July) was also thought to contribute to the sluggish asphalt activity. Marketers opined that the first 10-14 days in July end up being slow on the release of jobs due to the fiscal year change.
There were some additional price retail prices changes seen in the East coast last week. However, the first price movement occurred on 1 July, when one East coast refiner raised all its asphalt prices, wholesale and retail, by $20. This took the supplier’s wholesale PG 64-22 to around $200/st fob, with a $5-7 premium for PG 64-28 grade. This supplier’s retail prices moved up to $225-225 fob for PG 64-22 from the New York Harbor market to Maryland. The Long Island market was reported to be at $230-235 fob.
Effective 8 July, one East coast refiner raised its asphalt prices by $20/st. The supplier reported that this change affected its entire East coast asphalt system. With this increase, its prices moved up to $220-230 for PG 64-22 at terminals in New Jersey to coastal North Carolina. The supplier reported a $15 premium for its PG 70-22 grade.
One eastern Pennsylvania supplier raised its prices at all locations in early July. With these changes, its western New York price moved up to $190 fob for PG 64-22, and $220 for PG 64-28. The supplier’s price Pittsburgh, Pennsylvania moved up to $190 for PG 64-22, while its price in northwest Pennsylvania went up to $185-190 fob.
Another East coast marketer reported raising its Savannah price up to the $225 fob level, effective 8 July. The East coast player raised its southern Florida price up to the $235 fob price, effective 8 July. The supplier stated that price change at other locations could occur this week.
Yet another East coast refiner raised its prices in Atlanta on 7 July from $175-200 to $185-200.
One Jacksonville, Florida supplier had its prices holding at the $217 fob level, while its Tampa price was at $199 fob. Another supplier had its Jacksonville price at $200-205, and its Tampa price at $195-200 fob.
Gulf
coast commentary
There
were a few wholesale transactions heard in the Gulf coast last week, with
prices reported to be slightly higher than in the prior week.
In the eastern Gulf coast, a refiner sold a part cargo containing mostly PG 67-22, and some PG 52-28. The parcel was sold on a delivered basis, with an effective fob price of $168 for the PG 67-22 volumes and a $172 fob effective price for the PG 52-28 volumes. The deal was done early last week, for movement to the southeast.
One eastern Gulf coast refiner stated that it had some additional volume available for July movement.
A western Gulf coast refiner sold two 40,000 bl parcels of PG 64-22 at $165 fob refinery. The volumes were reported to be for prompt movement and were expected to stay within the Gulf coast region.
Retail liftings were reported to be slow in parts of the Gulf coast due to inclement weather.
Southern Alabama retail prices for PG 67-22 were reported to be as high as $210. Southern Louisiana retail numbers were reported to be at the $190 fob level for PG 67-22, according to one local marketer.
At the Texas letting last week, which had work for next year’s paving, prices appeared to be moving up higher. One supplier offered a fixed guaranteed price of $250 fob for PG 64-22, $330 fob for PG 70-22, and $340 fob for PG 76-22. These volumes were for volumes supplied from south Texas, and volumes originating from Oklahoma for delivery into the Dallas/Fort Worth, Texas market. The supplier stated that it had been able to take some work at that level. The supplier also had $30/st price escalators on all asphalt grades, which would go into effect on 1 January, 2007.
One marketer stated that some local suppliers were not willing to provide a fixed price for future work, due nervousness about future crude oil costs.
The current market price in southern Texas was reported to be at $210-225 fob for PG 64-22. One marketer felt that if WTI prices stayed at over $60/bl, it was very possible that August prices could be pushed to the $250 fob level for PG 64-22.
A New Mexico supplier reported quoting a west Texas job requiring PG 76-22 at $310 fob, with $15/st price escalators/year starting in 2006.
The New Mexico market was reported to be at $180-190 fob for PG 64-22, according to one local player. One supplier stated that it was bidding around $200 fob in this market for this year’s work, and has been unable to get any business. The supplier believed that it had priced itself out of the market. It was also quoting $15/st price escalators for next year’s business.
Midwest
commentary
There was
a wide range of wholesale pricing heard in the Midwest market. Suppliers and
buyers confirmed that the range was from a low of $130 fob to a high of $165
fob.
At least one refiner was offering wholesale barge asphalt at $130 fob. One buyer confirmed that it purchased a three barge tow of PG 64-22 at $130 fob.
Another refiner said it was selling most of its wholesale asphalt in the $150-155 fob range for PG 64-22. The supplier stated that it had a $10 premium for PG 58-28. But premiums for wholesale PG 58-28 were reported to be as high as $20 over wholesale PG 64-22.
At least one supplier was selling wholesale asphalt at the $160-165 fob range. The supplier had completed a couple of deals at the $165 fob level for delivery to the Gulf coast.
One wholesale supplier reported that it was quoting August volumes at $170 fob for PG 64-22, with additional differentials for softer grades.
One Midwest refiner reported that it was selling barge and truck quantities of AC-2.5 in the upper $190s minimum price.
Midwest refiners reported that rising crude costs and stagnant retail pricing has put tremendous pressure on refining economics. Several of these refiners are re-evaluating their internal economics to determine if it is economically advantageous to switch to a lighter crude slate and capture the high gasoline margins.
One Midwest refiner that had been supplying wholesale asphalt was reported to be sweetening up its crude slate. Buyers reported that they did not expect much additional wholesale asphalt from this refiner over the summer.
Chicago date-of-shipment prices were at $140-155 fob. One Chicago-area marketer stated that the range was $145-155, with the lower $145 fob price expected to remain in this market all year. PG 58-28 differentials in this market were at $5-20/st.
Eastern Iowa prices were heard at $165-175 fob. Southern Indiana prices were at $185 fob, according to one local player.
The Kansas market was reported to have firmed up to the $210 fob range for daily rack sales. One supplier pointed out that it was still supplying some older rack prices that were at the $100 fob level for PG 64-22. In Oklahoma prices for new work were heard at the $250 fob level for PG 64-22.
One Michigan supplier reported that its price in the northern section of the state went up from $175-180 fob to $190 fob last week. The supplier stated that its PG 58-28 had a $10 premium over PG 64-22.
Current truck rack prices in Toledo were at $175-180 fob, according to one local marketer. The marketer stated that it planned another price increase on 15 July. Southern Ohio prices were reported to be at $180 fob.
The Kentucky market was holding at $180 fob. Eastern Tennessee prices were around $195 fob, while Nashville and Memphis were at $190 and $185, respectively.
Rocky
Mountain & west coast commentary
The
wholesale prices range from the Rocky Mountain region was heard in the $115-130
fob range for conventional PG 64-22 and PG 58-28. One refiner was reported to
be doing most of its transactions in the $115-120 fob range.
Another wholesale refiner confirmed that it was selling most of its wholesale volumes at $125 fob. The supplier stated that it had some sales at the $130 fob level. The refiner admitted that it did not have a lot of excess availability of wholesale asphalt to supply over the summer months.
One Rocky Mountain supplier is warning its customers not to used 2005 prices for any 2006 work that might bid. The supplier informed its buyers that they should call before they bid to check on what the price would be for next year’s work. If these buyers did not call ahead, they would get a price of $200/st on a fob basis.
Tendering was reported to be slow in Montana. The market for neat PG 64-22 and PG 58-28 was heard at the $150-165 fob level. Specialty grade PG 64-28 was heard at a $40-50 premium over PG 58-28, while PG 70-28 was heard at a $60-70 premium over PG 58-28.
The current market in Wyoming and Colorado was reported to be at $165 fob for older contracts. One supplier stated that they may be locked in that price level for existing contracts, but any new contracts that are bid would be at price that were at least $20 higher.
Western Washington retail prices were heard in the $185-190 fob range, while the eastern half of the state was at $180-185 fob.
Oregon retail prices were at unchanged from the $185 fob number. One local supplier pointed out that prices will hold at the $185 fob level in this market as firm commitments have been made for the remainder of the 2005 season.
In Oregon, PG 70-22 prices were heard at the $185 fob level. PG 70-28 was reported to be at $245, while PG 64-28 was heard at the $225 fob level.
In northern California prices slipped were at $210 fob level to $195 for AR-4000 and AR-8000, while the southern California market was slightly higher at around $205 fob. The central California market was heard at prices that are $20 below the southern California market.
Canada
commentary
The
eastern Canadian asphalt market was stable last week. Toronto, Ontario prices
were reported to be in the C$265-275 fob range for PG 58-28. PG 64-28 was heard
at the $300 fob level. One marketer commented that the wide premium for PG
64-28 over PG 58-28 was due to the softening of PG 58-28 prices while PG 64-28
prices remained stable.
Ontario marketers reported feeling pressure to raise their retail prices. The higher cost of crude has raised refiners cost of production. The higher crude price has also caused wholesale asphalt prices to rise, thereby raising resellers costs to purchase wholesale asphalt.
Ontario marketers commented that a local supplier has had erratic production of asphalt, due to difficulty obtaining heavy Canadian crude oil supply.
Montreal, Quebec prices were also stable at the C$245-250 fob level last week for PG 58-28. Stiff competition at the 27 June Ministry of Quebec provincial tender caused prices to soften to this lower level.
Posted prices for PG 58-28 in the Montreal market remained unchanged. And differentials for premium grades compared with conventional PG 58-28 were also unchanged.
Some Quebec marketers opined that prices could strengthen by the end of July or early August due to strength in the crude oil market and rising prices of asphalt imports, particularly from the Midwest market.
Western Canadian marketers reported that they did not have much surplus wholesale asphalt to sell into the US market. And one western Canadian refiner was not supplying much wholesale asphalt into the US market as it was not able to compete with the wholesale prices being offered from the US Rocky Mountain region.
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