New York
East
coast
East
coast wholesale buyers were reported to have full asphalt inventories, which
has resulted in limited wholesale transactions. Marketers said this has kept
the east coast wholesale barge range at the $245-250/st fob level for PG 64-22.
Marketers expect wholesale prices to change once regional demand picks up and
inventories are depleted.
One east coast refiner is in turnaround and will be expanding its capability to handle more vacuum tower bottoms. The refiner said it is watching crude prices and the light-heavy differential, and it may decide to run a lighter crude slate.
There were some wholesale flux transactions, with prices reported to be in the $260-270/st delivered range into the midatlantic market.
In the New England market, prices were reported to be unchanged as marketers have not quoted any new prices for the season. Prices at the start of the asphalt season are expected to open up higher than prices at the end of last year, primarily due to the strength in heavy crude oil prices.
A western New York supplier reported its reference price at $315/st fob. The supplier said this price was effective immediately to customers. Another western New York and western Pennsylvania participant reported its opening price to be at $325 fob for PG 64-22. The supplier said it was trying for a $20 premium for PG 52-28 emulsion base and PG 58-28 over PG 64-22. The supplier was also trying to get a $25 premium for PG 64-28 over PG 64-22.
The extended paving season at the end of last year allowed for the completion of older jobs that were on the books. As a result, with limited or no carryover, marketers expect that sales at the start of the new paving season will be at new 2007 prices.
In the east coast, midatlantic market pries have risen by $20-25/st in the last couple of weeks, with most prices moving up to around the $300/st fob level for PG 64-22. Southern New Jersey showing a slightly softer $295-300/st fob range for PG 64-22.
In inland and coastal North and South Carolina, prices were reported to be stable at the $310/st fob level for PG 64-22. In Atlanta, Georgia, the market was holding at $305/st fob for PG 67-22. Savannah, Georgia prices were at $290/st fob for PG 67-22.
In Florida, Tampa and Jacksonville, Florida prices were holding at $285/st fob. Prices in Pensacola were at around $300/st fob for PG 64-22.
Gulf coast
There was some
buyer interest in purchasing wholesale barge supplies, but there were no new
deals reported. Suppliers and buyers appeared to be evaluating where they felt
the market should be at in April. One supplier said crude prices were dictating
that prices needed to go up, but it was unclear by how much. Last prices in the
region for March delivery were around the $210-215/st fob range for PG 64-22.
While midwest buyers’ asphalt inventories were reported to be high, Gulf coast buyers’ inventories have room for more wholesale asphalt. One marketer said strong paving liftings in the region have kept inventories from filling up.
Retail prices were mostly stable in the Gulf coast market. In southern Alabama, prices were heard at $300-305/st fob for PG 67-22. One southern Alabama participant held at $340/st fob but was unable to make any sales. In northern and central Alabama, asphalt was at $325/st fob for PG 67-22. One marketer said that if southern Alabama prices continue to be discounted relative to the rest of the state, northern and southern Alabama prices could come under pressure.
Gulf coast economics showed that asphalt’s coker alternative value was over $350/st, well above the Gulf coast wholesale asphalt value of $210-215/st. But asphalt’s HSFO alternative value in the Gulf coast, at $189.85/st, was lower than the Gulf coast wholesale asphalt value — providing an incentive for Gulf coast refiners to blend their vacuum tower bottoms into asphalt instead of fuel oil.
In southern Mississippi, one supplier dropped its prices from $325/st fob to $300/st fob for PG 67-22. Specialty grade PG 76-22 had a $100/st premium over PG 67-22. Central Mississippi prices were also at $325/st fob for PG 67-22. In southern Louisiana, the market was reported to be at $325/st by one player.
Southern Texas prices were stable at $275/st fob for PG 64-22. New volumes in New Mexico were said to be at $300/st fob for PG 64-22. New Mexico marketers are concerned about the adequacy of supply in the peak summer paving months. The supply tightness is reported to be the result of a fire at a west Texas refinery.
Midwest
Since the asphalt season has not started up in the midwest market, there
was limited price reaction to the 22 March fire at BP’s 410,000 b/d Whiting
plant near Chicago. BP brought forward a 175,000 b/d crude unit turnaround at
Whiting that is expected to last at least a month. The firm will evaluate the
damage in a week and is not making any asphalt. The refiner expects to supply
its customers from its asphalt inventory supplies.
Wholesale asphalt prices for April were said to have risen from $190-205/st for PG 64-22 to $195-210/st fob. Most of the wholesale volume that is moving was reported to be rail volumes. The wholesale premium for PG 58-28 was reported to be holding at $30/st.
The retail premium for PG 58-28 over PG 64-22 is also $30/st, according to midwest participants. One supplier said that if it did not get this premium, it would not sell the grade.
One midwest refiner sold approximately 150,000 bl of flux in the midwest for April delivery. The price was $220/st fob but around 10pc of it was priced at $215 fob. One small piece of flux was on a delivered basis, but the fob equivalent price was around $220. These flux wholesale volumes were said to be moving by barge, rail and truck.
In the Chicago market, the retail prices for the start of the season were said to be around $315-325/st based on some older work on the books. But one supplier said it was contracting work for July at $335/st plus or minus $5. One supplier said buyers did not appear to be resisting the new price for July.
In central Illinois, at least one supplier was quoting the state index for state work. For private jobs where the index did not apply, the supplier was quoting $350/st firm through August and $375/st firm through the end of the year.
In St Louis, Missouri, the market was reported to be at $280-290/st fob for PG 64-22. One supplier said this was due to index-based pricing. But local marketers do not expect prices to stay at this level during the summer, especially if heavy crude prices remain strong.
Indianapolis, Indiana prices were holding at $330/st, while in southern Indiana, prices were at $307/st for PG 64-22.
The Oklahoma market was reported to be in the $275-310/st fob range for PG 64-22, with sales activity occurring even at the higher end of the price range. The Kansas market was reported to have some prices at the $280-290/st fob level for PG 64-22.
In Cincinnati, Ohio prices were at $295/st fob for PG 64-22. Memphis, Tennessee prices were at $310/st fob, while Chattanooga, Tennessee prices were at $290/st fob.
Rocky Mountain & west coast
The US Rocky Mountain wholesale price range remained at $170-185/st fob. One
buyer that was purchasing wholesale asphalt at $170 fob in March reported that
its Rocky Mountain supplier was keeping the price stable at $170/st fob for
April. One Rocky Mountain supplier that was at the $185/st fob price said it
had not changed its wholesale price for April. The lack of movement in the Rocky Mountain wholesale price range surprised some market observers, who had expected
prices to rise with higher heavy crude costs. But high regional inventories for
asphalt may have been a factor in keeping prices stable.
In Montana, commercial work has started up, but highway jobs are not expected to begin until 1 April. Most recent bids in Montana have been around the $300-350/st fob for PG 64-22 and PG 58-28. One Montana supplier is now certified to sell paving grades into the Alberta market.
In Wyoming and Colorado, retail prices were at $350-350/st fob for PG 64-22 and PG 58-28. One Wyoming supplier has a turnaround planned from 13 May for 26 days. The entire refinery will be down during this period and existing customers will be supplied from existing asphalt inventory.
The Arizona market was stable. One supplier reported the Phoenix market to be at $340/st fob for PG 70-10, while Tucson prices were slightly higher by $5-10/st for PG 70-10. Northern Arizona prices were unchanged at $360/st fob for PG 64-22 and PG 58-28.
In Oregon, a supplier took a job on I-5 Captial Highway Tualatin which called for 2,500t of PG 70-22 ER (elastic recovery). The volume was taken at $370/st fob. Another 400t of PG 70-22 was taken at $325/st fob. One supplier took both volumes. Liftings were reported to be strong in the Oregon market.
A northern California marketer was reported to be unchanged from the $310-315/st fob for PG 64-16 and PG 70-10, while the central California market was stable at $300/st fob.
The southern California market was at $290-310/st fob for PG 64-16 and PG 64-10, with most of the strength reported to be at the $295-300/st fob range. But one supplier reported that it was attempting to move its prices upwards on 1 April by $15-20/st to the new $315/st fob level for PG 64-10 and PG 64-16. Flat paving demand in the first quarter of the year was blamed for the weak asphalt prices. But a strong public works program going forward, along with strong private demand growth, is expected in the future.
Canada
The snow is melting
in western Canada, but the asphalt business is still at least a couple of weeks
away from starting up. Southern Alberta could see volumes picking up in two
weeks, while northern Alberta is not expected to start up for at least three
weeks.
There was a job tendered in Aldersyude, Alberta, that required 3,200t of Pen 120-150, which was taken at C$597/t ($516.28/t) fob the closest supplier. The job also called for 2,700t of Pen 200-300 that was taken at C$591/t fob the closest supplier.
In Ontario, postings were reported to be at C$500/t fob for PG 58-28. One marketersaid the few loads that are moving for pothole repair work are at the C$490/t fob level for PG 58-28.
In Quebec, the first provincial bid for the new asphalt season will be on 12 April, covering work for April and May. This tender will provide the first price indication in the new paving season.
On 26 March, one Quebec marketer changed its rack price for PG 58-28 to C$375/t fob, saying it had moved some asphalt at this price.
One Quebec supplier released its terminal rack prices for the start of the new paving season, taking effect on 1 April. The base grade PG 58-28 was increased by C$157/t to C$452/t. The increase reflected higher output costs due to higher heavy crude prices.
One Quebec supplier has informed its customers that it will be moving its price to C$450/t, effective 1 April. The supplier said this change was necessary due to the simmering geopolitical situation with Iran that was causing feedstock costs to rise.
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