New York
East
coast
Wholesale buyers saw
stability in the east coast wholesale market. An east coast buyer reported
completing a small deal for around 23,000 bl of PG 64-22 for delivery in
February and March. The volume was sold by a local refiner at $260 delivered,
or around $250 on a fob basis. The buyer commented that the $260 delivered
price was around $20 higher than what it paid for a parcel just three to four
weeks ago.
An east coast flux buyer stated that flux prices have come under pressure lately, with recent numbers heard at the $250 delivered level into the midatlantic market.
Last prices heard in Portland, Maine were at $335 fob for PG 64-28. New England PG 64-28 prices were reported to be in a wide $350-375 range, depending on the supplier.
New York Harbor area prices were unchanged at $285 for PG 64-22. In northern New Jersey, PG 64-22 prices were holding at $285 fob, while southern New Jersey numbers were at $275-280 fob. One New Jersey supplier was at $375 fob for PG 76-22. Baltimore, Maryland prices were at $280-285 fob for PG 64-22, while Virginia prices were at $285-295 fob. Inland North Carolina prices were at $310 fob for PG 64-22, while coastal North and South Carolina prices were holding at $310 fob for the same grade.
In Georgia, PG 67-22 prices in Atlanta were at $315 fob, according to one local supplier. In Savannah, Georgia, one supplier reported prices at $290-300 fob for PG 67-22, while another had its prices at $300 fob.
In Florida, Jacksonville was at $300-305 fob. In Tampa, one supplier had its prices at $292-297, while another was at $295 firm. Eastern Florida prices were at $300 fob. A southern Florida supplier was at $300 fob for PG 64-22 and PG 67-22.
Gulf
coast
There were no new
paving wholesale deals heard from Gulf coast refiners. One western Gulf coast
refiner was reported to have no asphalt to sell into the open market due to its
processing deal. An eastern Gulf coast refiner stated that it did not close on
any deals last week, and was assessing its internal system requirements before
offering any more new asphalt into the open market.
At least one buyer was continuing to move wholesale asphalt from a Midwest refinery source. These volumes were reported to have been committed to earlier. One marketer commented that some of these deals were probably done below the $200 fob level.
Prices for new Midwest wholesale volumes that would move from the Midwest to the Gulf coast were reported to be moving up for February sales, with preliminary prices heard at the $205-210 fob level for PG 64-22. No specific transactions were heard at the higher price level.
In Alabama, cold weather conditions have slowed down paving work. One marketer stated that the only state paving jobs with any activity are the ones that require base work. There is no surface work being done in the state. There were no changes heard in Alabama asphalt prices, with the northern and central Alabama markets holding at $335 fob for PG 67-22.
In southern Mississippi, the market was closer to the $330 fob level for PG 67-22. Southern Louisiana prices were holding at $330 fob for PG 64-22.
One Fort Worth, Texas supplier had its prices at $325 fob for PG 64-22. The supplier was at $415 for PG 70-22, and $430 for PG 76-22. In southern Texas the selling price for PG 64-22 was reported to be primarily at $275 fob.
Midwest
Midwest wholesale buyers reported seeing a
significant change in wholesale supply availability and costs. Buyers pointed
out that wholesale asphalt suppliers were facing higher costs from a narrowing
light-heavy crude price spread — WTI to Lloyd blend spread was at $14.13/bl
last week, compared to $16.78/bl back in mid-December. Weak crack spreads for
lighter products were raising asphalt breakeven costs. The result of the
narrowing crude price spreads and the higher breakeven costs was an increase in
the cost of producing asphalt, and a resultant economic incentive for refiners
to move away from asphalt production by switching to the processing of lighter
crudes.
One Midwest refiner stated that it was currently moving wholesale volumes that had previously been scheduled to move in December. These deals were moving in the $190-210 fob range. The refiner was not sure if it would have any additional wholesale asphalt to sell on the open market.
One Midwest refiner that was at the $200 fob level had told its customers that it was contemplating a move up to the $205-210 fob level for January-end and February sales.
On the retail side, slow paving activity in states like Kansas and Oklahoma has resulted in a build-up in inventories, according to one local buyer. Grand Island , Nebraska prices were at $385 fob for PG 64-22.
In Chicago, Illinois, prices were reported to be at $325 fob through June, with a $25 premium after June. In central Illinois, prices were at $345 fob through June 2007. In northwest Indiana, prices were at $330 through June 2007 with a $30 premium beyond that.
At the January letting in Wisconsin, quotes from northern Wisconsin refiner were at $360 fob for PG 58-28 or PG 64-22, and $430 for PG 58-34. Quotes from a northern and from central Wisconsin terminals were at $380-390 fob for PG 64-22 and PG 58-28. Quotes from Twin Cities, Minnesota were heard at $350-360 fob for PG 58-28.
In Indianapolis , Indiana, quotes were at $350 firm for 2007. In Canton and Cleveland, prices were reported to be at $390 not-to-exceed through July, and $425 not-to-exceed through December.
In northern Ohio, prices were at $345 fob through June 2007. A Cincinnati supplier was at $295 fob for PG 64-22. Eastern Kentucky prices were at $300. In Tennessee, prices slipped in Memphis and Nashville by $7 to $323 fob for PG 64-22. Louisville and Knoxville were at $300 and $310, respectively.
Midwest
Midwest wholesale buyers reported seeing a
significant change in wholesale supply availability and costs. Buyers pointed
out that wholesale asphalt suppliers were facing higher costs from a narrowing
light-heavy crude price spread — WTI to Lloyd blend spread was at $14.13/bl
last week, compared to $16.78/bl back in mid-December. Weak crack spreads for
lighter products were raising asphalt breakeven costs. The result of the
narrowing crude price spreads and the higher breakeven costs was an increase in
the cost of producing asphalt, and a resultant economic incentive for refiners
to move away from asphalt production by switching to the processing of lighter
crudes.
One Midwest refiner stated that it was currently moving wholesale volumes that had previously been scheduled to move in December. These deals were moving in the $190-210 fob range. The refiner was not sure if it would have any additional wholesale asphalt to sell on the open market.
One Midwest refiner that was at the $200 fob level had told its customers that it was contemplating a move up to the $205-210 fob level for January-end and February sales.
On the retail side, slow paving activity in states like Kansas and Oklahoma has resulted in a build-up in inventories, according to one local buyer. Grand Island , Nebraska prices were at $385 fob for PG 64-22.
In Chicago, Illinois, prices were reported to be at $325 fob through June, with a $25 premium after June. In central Illinois, prices were at $345 fob through June 2007. In northwest Indiana, prices were at $330 through June 2007 with a $30 premium beyond that.
At the January letting in Wisconsin, quotes from northern Wisconsin refiner were at $360 fob for PG 58-28 or PG 64-22, and $430 for PG 58-34. Quotes from a northern and from central Wisconsin terminals were at $380-390 fob for PG 64-22 and PG 58-28. Quotes from Twin Cities, Minnesota were heard at $350-360 fob for PG 58-28.
In Indianapolis , Indiana, quotes were at $350 firm for 2007. In Canton and Cleveland, prices were reported to be at $390 not-to-exceed through July, and $425 not-to-exceed through December.
In northern Ohio, prices were at $345 fob through June 2007. A Cincinnati supplier was at $295 fob for PG 64-22. Eastern Kentucky prices were at $300. In Tennessee, prices slipped in Memphis and Nashville by $7 to $323 fob for PG 64-22. Louisville and Knoxville were at $300 and $310, respectively.
Canada
The light-heavy Canadian crude
price spread has narrowed from December 2006 to January 2007, thereby making it
more expensive for Canadian refiners to process heavy crudes. Last week, the
WTI to Lloyd blend spread was at $14.13/bl, compared to $16.78/bl in
mid-December. Marketers commented that the narrowing is occurring later in the
winter than is typically observed.
In western Canada, British Columbia bid a highway job on 15 January requiring 1,500t of asphalt for paving in Clearwater. The job was taken at C$538-540/t fob the closest refiner. Other than this job, there was limited paving activity in the British Columbia market. One marketer commented that so far only 20pc of the province’s highway work has been tendered for the 2007 paving season.
But Alberta has tendered around 50pc of its highway work — typically the highway hot-mix tonnage is around 4-5mn t).
There has been no tendering activity in Saskatchewan and Manitoba. Since this is an election year in Manitoba, a budget increase is expected for road infrastructure. One source commented that last year the highway department tendered around 30,000t of asphalt, and this year the volume would be 50,000t of asphalt. Private paving demand for the province was estimated at around 35,000t.
Last prices heard in Manitoba were towards the end of 2006, when prices were at C$540 fob the closest Alberta source.
Western Canadian refiners are expecting 2007 to be different from 2006. Excessive commitment to the US market in 2006 was thought to be a key reason behind the shortages seen last year. This year, local marketers state that they are already planning to take care of their local requirements first.
In eastern Canada, there were no changes heard in Quebec or Ontario pricing as the market is shut down for the winter. One local marketer stated that uncertainty in the crude market has made it very difficult to project where prices might be in the 2007 paving season.
But Quebec-area contractors that have requested a preliminary price for the 2007 season have been given C$450/t for PG 58-28 by at least one local marketer. The marketer commented that the premium for PG 58-34 over PG 58-28 will probably be at C$60/t, with the premium for PG 64-34 over 58-28 will probably be at C$120/t.
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