New York, 6 November (Argus)
West coast commentary
There were no east coast barge transactions from New Jersey refiners. One refiner stated that offers of lower-priced asphalt imports in the low $200s on a delivered basis for PG 64-22 were making it very difficult for local refiners to stay competitive. One refiner stated that it was unwilling to supply asphalt at the import price level and had opted to stay out of the wholesale barge market. Another refiner did not have any surplus asphalt available, and a third refiner was expected to be shutting down shortly for the winter.
On the east coast, one PG 64-22 wholesale deal from an export source was completed at $220 delivered to the east coast.
A flux importer on the east coast reported recently purchasing wholesale flux at $240-250 fob.
East coast retail prices continued to slip, with larger, more dramatic price drops seen in certain mid-Atlantic states. One supplier confirmed that it was matching market price drops by its competitors right away. Sluggish paving demand in October, a historically high peak paving month and lower costs due to weaker crude prices were reported to be the key reasons behind the price declines.
Prices dropped by as much as $25 in the US east coast market. In eastern New York, prices slipped to $320 fob from $335 fob for PG 64-28. A western New York supplier dropped its reference price from $335 to $325 fob on 1 November.
Northern New Jersey prices slipped by $10 to the new $315 price level, while in southern New Jersey, prices were at $310 last week, after dropping by $25.
Baltimore prices were heard at $310-315 fob, compared with the prior week’s $335 price level. Virginia prices slipped from $315-320 from the previous $340 fob range for PG 64-22.
The coastal Carolinas were at $325, after falling by around $15 from the week before. The inland Carolinas were firmer, with prices at $340 fob for PG 64-22. The Atlanta, Georgia, market slipped by $10 to $340 fob for PG 67-22. Savannah prices were at $320-325 fob.
One Florida supplier kept its prices stable at $325 fob for Jacksonville and $320 fob for Tampa. Another local supplier dropped its Jacksonville prices by $10 to $325, while its Tampa price was unchanged at $324-327 fob.
One southern Florida supplier dropped its price by $10 to $330 fob. Another southern Florida supplier had its price at $345 fob.
Gulf coast commentary
Wholesale buying interest picked up in the Gulf coast market as buyers attempted to purchase wholesale parcels before the end of the year. Several of these buyers had been holding off on purchases, in the hope that prices would continue to soften. Some buyers were stepping up and seriously inquiring about asphalt purchases as they are concerned that they may miss some low priced deals in the market.
Over the last few years, the US has seen the lowest winter-fill prices in November and December of the year. Uncertainty over the level of wholesale pricing after the start of the new year gave added impetus to buyer interest in wholesale purchases.
An eastern Gulf coast refiner reported completing a couple of deals last week. The refiner sold a total of 65,000 bl, 60,000 of which consisted of PG 67-22, with the remaining 5,000 bl of 52-28. The supplier sold the PG 67-22 at $237-247/st delivered, or a fob equivalent price of $200/st. The PG 52-28 volumes were sold at $252/st delivered, or a fob equivalent price of $235. The volumes will move in mid-November.
Last wholesale flux sales were heard at the $250-255 fob level. These volumes were for delivery in the first half of November and were sourced from the western Gulf coast.
Gulf coast retail prices were mostly stable, with some softening observed in Louisiana.
In Mobile, Alabama, PG 67-22 prices were at $370 fob, while one supplier in northern and central Alabama had its retail prices at $350 fob for PG 67-22. One southern Mississippi dropped its retail prices to the $350 fob level for PG 67-22.
In southern Louisiana, one supplier dropped its prices for PG 67-22 by $10 to $335 fob. The southern Texas market was reported to be holding at $275 fob for PG 64-22. One supplier in the Fort Worth, Texas, market has its posted price for asphalt at $350 fob for PG 64-22. The supplier also had a posting of $480 for PG 76-22.
Midwest commentary
The Midwest wholesale barge range for PG 64-22 was in the $195-230 fob range for PG 64-22. One marketer stated that a lack of barges on the river had caused some participants to use rail instead. The wholesale rail range was reported to be wider than the wholesale barge range.
Some resellers still have expensive inventory in their tanks that they purchased in late July and early August and have still to work off, which has prevented them from participating in the winter-fill market.
A Midwest refiner sold 50,000 bl of roofing flux at $250 fob. These volumes were for November delivery.
Retail prices softened across several Midwest states as local suppliers attempted to move volumes out before the season closes for the year. According to one participant, October was cold and wet, which most likely contributed to the poor sales compared with historical levels and compared with expectations. If the weather co-operates, Midwest participants could potentially pave in November and December and make up the lost October sales volume.
In Chicago, Illinois, date-of-shipment sales were at $325-340 fob for PG 64-22. Central Illinois prices were at $345-355 fob. PG 58-28 was reported to have a $30 premium in this market.
Minneapolis/St Paul, Minnesota, prices were unchanged at $320 fob for PG 64-22. One supplier reported having sales at this price level.
Effective from 1 November, an Indianapolis, Indiana, supplier changed its reference price to the $330 fob level for PG 64-22. In northwest Indiana, the price range for date-of-shipment sales of PG 64-22 was reported to be at $340-350 fob. Southern Indiana prices slipped by $10 from $332 to $322 fob for date-of-shipment sales.
Detroit, Michigan, prices were reported to be unchanged from the $350 fob level. Northern Ohio prices were holding at $345 fob for PG 64-22, while southern Ohio prices slipped by $10 to $310 fob for date-of-shipment sales.
One supplier dropped its western Kentucky price to $325 fob from $350 fob, effective from 1 November. Louisville prices were down by $10 to the $315 fob price.
In Tennessee, prices shifted downwards by $10, with Memphis moving to $350, Nashville to $350, Chattanooga to $330 and Knoxville to $340.
Rocky Mountain and west coast commentary
Rocky Mountain wholesale prices slipped slightly from the $200-215 fob range in the prior week to $195-215 fob last week. The $195 fob price was confirmed as a PG 64-22 wholesale sale for November. The buyer at the $195 fob price stated that it was trying to purchase as much winter-fill as it could at this price level. One buyer stated that the refiner it deals with is only quoting prices for 30 days out.
One Rocky Mountain refiner that had some coker reliability issues at its refinery reported that it had more than expected asphalt supply. The supplier stated that it has offered product at $210 fob for movement in November.
One Rocky Mountain refiner stated that it is moving away from annual pricing of wholesale asphalt and is considering quarterly pricing instead.
October brought poor paving weather conditions, resulting in demand reduction of around 10-15pc compared with the prior year. So far in the first week in November, Rocky Mountain refiners were greeted with even more rain, causing some price stability.
There has not been much PG 64-22 bid recently in Montana. The last bid letting had PG 64-28 and PG 70-28 for bid. The PG 64-28 carried a $70-100 premium over PG 64-22 or PG 58-28, while PG 70-28 has carried a $110-140 premium.
In Wyoming and Colorado, there was no change in retail prices for PG 64-22 and PG 58-28, which were at the $350-360 fob level.
In Portland, Oregon, prices were at $330-350 fob for PG 64-22. One local participant stated that the $400 retail prices that were in the market a few weeks ago were nowhere to be found last week. There is little demand right now for speciality grades. However, PG 70-22 was carrying a $10 premium over PG 64-22, while PG 64-28 had at least a $20 premium. One marketer pointed out that recently it has only quoted prices for PG 64-28, with no actual sales at that level.
In the Phoenix, Arizona, market, prices were at the $395-400 fob level for PG 64-16 and PG 70-10, about $10 lower than last month. Specialty grade PG 76-22 was at $475-480 fob. In northern Arizona, $415 was the price for PG 64-22, while the Tucson market was at $400 for PG 70-10.
In northern and southern California, prices were holding at $335 fob for PG 64-10 and PG 64-16. The central California market was reported to be $10 lower.
Canada commentary
The eastern Canadian province of Quebec faced further price deterioration, with PG 58-28 prices slipping from the prior week’s C$320-330 ($281-290) range to C$305-310 fob last week. One marketer commented that this price slippage was not connected to the lower prices that were seen at the last provincial tender, as there was no PG 58-28 bid at that tender.
In Montreal, Quebec, the premium for PG 64-28 dropped to C$40 over the PG 58-28 in the open market. The premium for PG 58-34 over PG 58-28 was reported to be at C$45 by one player, and C$40-45 by another participant.
One eastern Canadian participant dropped its posted prices by C$18, effective from 3 November. With this change, the supplier has a posted price of C$318 for PG 58-28, with C$40 and C$45 premiums for PG 64-28 and PG 58-34, respectively.
In Ontario, October has historically been one of the busiest paving months of the year. However, sources stated that October sales were down by 20pc compared with previous years. Additionally, Ontario asphalt sales in October are typically higher than September, but this past year, October sales dropped below levels observed in September.
The disappointing October affected pricing in the Ontario market and the price slipped to the C$395-410 level for PG 58-28. One source felt the market was closer to C$390-410 for PG 58-28. On Ontario, the premium for PG 64-28 over PG 58-28 was holding at C$30.
Marketers commented that despite the almost C$100 price spread between the Ontario and Quebec markets, volumes may not move from lower-priced Quebec into Ontario due to the long haul between these markets and the anticipated imminent end to the paving season, especially if the weather turns cold.
In western Canada, asphalt rack prices have remained unchanged since last summer. Tendering for this year is complete, and marketers are quoting work for next year, which is at significantly higher prices than 2006.
At least one Canadian Rocky Mountain refiner has product to offer in the wholesale market. The supplier reported completing a few deals for November/December in the $200-250 (C$227-284) range for movement into the US market. The refiner stated that since it had its railcars tied in movements to its own terminal locations, the supplier was looking to supply wholesale buyers that had their own railcars available. The supplier pointed out that it had a $7/st (C$8/st) surcharge if it used its own railcars.
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