New York, 24 July ( Argus)
East coast
A major fire shut Venezuelan state-owned PdV’s 635,000 b/d Amuay refinery on 17 July. Since the refinery is a major source of roofing flux to the US east coast, this news sent east coast roofing flux buyers scrambling for alternative sources of supply.
The last prices for imported flux were at $360/st delivered for cargoes, according to one local buyer. One buyer stated that it had purchased flux at this level, but it expected that its next parcel would be at a higher level.
One east coast refiner reported receiving several calls from buyers seeking to procure roofing flux over the next few months. The refiner stated that it offered a price that would allow it to economically justify making the roofing flux. The supplier stated that it was successful at selling a parcel of flux at $425/st fob for lifting by barge to a Midatlantic location.
The rising cost of wholesale barrels is putting pressure on retail prices. Wholesale buyers have to determine what the replacements costs will be before they adjust their retail prices upwards. One New England buyer stated that it expects to load a parcel this week, and the supplier has yet to provide a specific price for the volumes.
lA wholesale supplier stated that it has not sold any additional wholesale asphalt last week. The refiner’s last PG 64-22 deal was at $345/st fob. The supplier was offering a $10/st premium for PG 64-28 parcels.
Retail prices in Portland, Maine were at $390/st fob for PG 64-28. One New England supplier was holding its prices at $365-370/st fob for PG 64-28 in Boston, Massachusetts and southern Connecticut (exclusive of the gross receipts tax).
Two refiners reported no changes to east coast retail prices. One supplier stated that its prices were in the $375-390/st fob range for PG 64-22. The supplier stated that the Long Island, New York market was slightly higher at $385-395/st fob.
One East coast supplier raised its prices by $10-15/st from North Carolina to Florida. With this increase, the supplier’s coastal Carolinas price was at $400/st (on the upper end), while the supplier’s inland Carolinas price was as high as $410/st fob (on the upper end).
One Atlanta supplier raised its prices by $10/st to $410/st on the upper end. One Savannah supplier raised its prices by $15/st to $410/st on the upper end. Another Savannah supplier raised its prices by $10 to $405/st fob, effective last week.
One Florida supplier raised its prices up by $15-20/st, effective on 20 July. The supplier raised its Jacksonville price to the $395/st fob level, its Tampa price to the $390-392/st fob level, and its eastern Florida price to the $385/st fob level. The southern Florida market was the only Florida market that was unchanged at $385/st fob for PG 64-22. Another Tampa supplier was at $395-410/st fob for conventional asphalt.
Gulf coast
Wholesale asphalt prices firmed slightly in the Gulf coast for July sales. Refiners appeared reluctant to give out specific wholesale prices for August owing to volatility in crude prices.
There were no new deals reported from the western Gulf coast. Last deals were at the $330/st fob range for PG 64-22. One refiner reported that it had sold two parcels at the $330/st fob range, with one parcel moving to a local buyer that was attempting to fill up a ship. The supplier commented that if it were to offer any asphalt today, its price would be no less than $335-340/st fob for PG 64-22.
Another western Gulf coast refiner reported its last deal at $335/st fob, which just loaded this week. The volume was for over 200,000 bl of PG 64-22 to the east coast market. The supplier stated that the deal was done last week. The supplier stated that it was seeking $345/st fob for its next PG 64-22 wholesale deal.
An eastern Gulf coast supplier reported selling 110-115,000 bl of PG 67-22 to three different customers at a delivered price range of $347-351/st. The fob equivalent price on these volumes was $334/st for the majority of the volume, with one piece at $332/st fob. Most of the volume is to lift between now and the end of July, with one 20,000 bl piece moving in the first half of August. The supplier stated that with the completion of this deal, it is now sold out for the remainder of July. The refiner has not quoted any wholesale prices for August.
Retail prices appeared to be relatively stable in the Gulf coast region.
A southern Alabama supplier raised its PG 67-22 rack prices in Mobile, Alabama by $15/st to $395/st fob. The supplier stated that as a result of limited production of PG 64-22, the product was currently carrying a $10 premium over PG 67-22.
In southern Louisiana, one supplier reported its price to be holding at the $340/st fob price. A southern Texas supplier stated that its prices were at $385/st fob for PG 64-22.
Midwest
The Midwest wholesale range for barges widened from the $325-340/st fob range to $315-340 fob/st. The wider range was owing to one supplier offering barges at the $315/st fob level for July. One buyer confirmed that it purchased a two barge tow of on-spec PG 64-22 for July loading from a northern Midwest supplier at $315/st fob. The range for rail sales from the Midwest remained in the wide $325-375/st fob range.
The availability of one or more barges at below $325/st fob caused some discussion as to whether the Midwest wholesale prices were softening. Some participants commented that asphalt demand was slower than expected because of higher asphalt prices, while production remained strong, causing some refiners to get long on product. Some marketer observers commented that the true test of whether the market was softening would come from August wholesale prices — if August wholesale prices continued to fall, then the market direction for wholesale prices would have changed for this region. But there were no specific wholesale quotes offered for August lifting from local suppliers.
One lower Midwest supplier raised its wholesale prices for August for PG 64-22 volumes that are moving westbound by rail. The supplier’s price moved up by $25/st to $350/st fob for August sales. Strong demand from the certain western US states (Utah, New Mexico and Arizona) was the main reason behind the price increase.
Wholesale PG 58-28 was reported to have a $25/st premium over PG 64-22. This premium was being offered by at least two local players.
Retail prices were relatively stable in the Midwest market at last week’s reported levels. In Chicago, Illinois, the retail price range was $340-400/st fob. One supplier stated that its date-of-shipment sales were at the $340/st fob level for PG 64-22. St. Louis, Missouri date-of-shipment sales were also at the $340/st fob level. In Minneapolis/St. Paul, Minnesota, the asphalt retail market was reported to be around the $325-360/st fob range.
The northern Ohio market was reported to be at $370/st fob for date-of-shipment sales, according to one local marketer. Last quotes from another supplier were at $385/st fob.
Last quotes in Indianapolis were at $390-405/st fob for PG 64-22, with a $30 premium for PG 58-28.
There were no changes heard in the Kentucky and Tennessee markets. Prices in Chattanooga, Tennessee were at $370/st fob, while Nashville prices were at $365/st and Knoxville prices were at $375/st.
Rocky Mountain & west coast
The Rocky Mountain wholesale price range for rail deals remained in the $285-325/st fob range for PG 64-22 and PG 58-28. Buyers reported that wholesale supply availability from the Rockies does not appear to be as tight as it was a few months ago. However, since these are the peak paving months in the Rockies and West coast, Rocky Mountain refiners expect any increase in production will get soaked up by local paving demand.
One wholesale asphalt buyer confirmed that its supply source from the Rockies remained at the $325/st fob range for PG 58-28 for July. The buyer stated that the supplier had indicated that the price would most likely remain around the same level in August, but the supplier had been noncommittal about a specific price for August. Extreme volatility in the crude oil markets and political tensions in the Middle East have kept crude prices strong, and asphalt prices from falling. Rocky Mountain wholesale suppliers are still offering month-to-month wholesale pricing to their customers.
Demand for wholesale asphalt remained strong from the southwest states and Utah. One lower Midwest refiner raised its rail prices for August by $25/st to $350/st fob for PG 64-22. These volumes will move westbound to markets such as Utah, Arizona and New Mexico.
While some Rocky Mountain states are currently tight on asphalt, the bigger concern is about supply availability in the second half of the year. This has led to higher quotes for the second half of the year, and in some cases even higher than quotes for next year’s work. Suppliers are more concerned about their ability to supply asphalt this year, than they are about supplying the market next year.
Asphalt retail prices in Montana are at $350/st fob for PG 58-28. There are several contracts on the books at prices that are at $200/st or lower. Marketers are meeting their lower priced contractual obligations to their customers.
In the Wyoming and Colorado markets, quotes for the second half of this year have been around $400/st, while the range of quotes for next year were at $390-420/st fob for PG 64-22 and PG 58-28.
The Utah market remained extremely tight on asphalt. Maketers pointed out that this is the result of one or mores suppliers pulling out of the market as a result of reduced supply availability.
In western Washington, one range was reported to be at $340-345/st fob, according to one marketer. In Portland, Oregon, one supplier moved its rack price to $350/st from 25 June, and then to $375/st on 9 July. Another supplier raised its prices for PG 64-22 to $375/st fob, effective 15 July. Additionally, the supplier’s price for PG 70-22 went to $385/st fob and PG 64-28 went to $395/st fob.
The northern California market was reported to be in the $345- 355/st fob range for PG 64-16, while the central California market was at $340-360/st fob for PG 64-16 and PG 64-10. The southern California market ranged from $350-375/st fob for PG 64-16 and PG 64-10.
Las Vegas, Nevada prices were at around $400/st fob for PG 64-22, according to one area marketer. Northern Arizona prices were at $500/st fob for PG 58-28 and PG 64-22, while Phoenix prices were at $400-450/st for PG 70-10, with PG 64-16 around the $475/st fob level.
Canada
In the western Canadian provinces of Manitoba and Saskatchewan, there are only one or two suppliers participating in the market. This tight supply situation is expected to reduce the number of jobs that get paved this year, as some recent road work has had no asphalt bidders.
In Manitoba, Pen 120-150, Pen 200-300 and Pen 150-200 have been recently sold at C$540/t netbacks. There has not been much work bid in Saskatchewan, but recent prices have been in the C$520-540/t fob range. One supplier stated that the Saskatchewan market is extremely short on asphalt. At a bid letting in early July, there was around 17,000t of asphalt bid, but 7,000t of this volume had no bidders.
Manitoba has bid two jobs so far this year requiring PG 58-34. One of these jobs closed last week, and the other about three weeks ago. Prices were heard at around the C$580/t fob level. One western Canadian marketer pointed out that the C$40/t premium that PG 58-34 has over conventional asphalt is not enough to justify making it.
The eastern Canadian province of Quebec has its next provincial tender this week for August volumes. Current prices in the Montreal, Quebec market were reported to be in the C$480-485/t range, with some prices thought to be at the C$475/t fob level. One supplier commented that stiff competition in this market caused prices to go down from the C$495/t fob level that was reached following the last provincial tender.
One marketer commented that higher crude oil prices and the high cost of importing asphalt from the US could put pressure on Montreal, Quebec retail prices.
In Toronto, Ontario, asphalt prices were reported to be around the C$490-495/t fob range for PG 58-28. Just as in Quebec, PG 64-28 had a C$30/t premium over PG 58-28 in Ontario.
Quebec had a special government bid for small volumes requiring special additives (less than 2,000t distributed between three grades). This bid had nothing to do with the monthly provincial tender in Quebec. There were three bidders for this work. Quotes for the PG 58-28 with special additives were at C$505-540/t, while quotes for PG 58-34 with special additives were at C$560-600/t. PG 64-34 with special additives was quoted at C$615-665/t.
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