New York, 12 December (Argus)
East coast commentary
The roofing flux
market has been a sellers market for most of 2005, and is expected to remain a
sellers market next year. Flux buyers reported that they are making as much
flux as they can to keep with the growing demand. The inability of suppliers to
keep up with the higher demand has resulted in an increase in flux prices
compared to historical levels. One buyer reported its last flux imports to be
at $225 delivered into the East coast. However, roofing flux import prices last
week were heard at the stronger $240 delivered number.
Last wholesale paving prices from New Jersey refiners were reported to be at $200-205 fob. One refiner stated that whatever wholesale volumes it has been supplying are deals that were done earlier. The supplier stated that it will not be participating in the winter-fill market, but may become a winter-fill buyers for its own terminal locations.
One New Jersey refiner reported quoting wholesale asphalt at $185-190 fob to potential wholesale buyers in the East coast. The supplier expected to complete a deal shortly. The supplier stated that it did not believe that it could sell additional winter volumes at the $200 fob level, especially with the wide arbitrage from the US Gulf coast.
The retail market was very quiet on the East coast. Winter weather conditions and snow slowed brought liftings virtually to a stand-still in the northeastern and midatlantic states.
Last PG 64-28 prices in the Boston, Massachusetts and southern Connecticut market was reported to be at $245-255, exclusive of the gross receipts tax.
New Jersey prices were reported to be at $240-250 fob for PG 64-22, with some numbers slightly lower at $230-235 fob. Virginia prices were reported to be at $240-255 fob. Coastal North Carolina prices were at $235-250 fob.
Atlanta, Georgia prices were holding at $225-235 fob. Jacksonville, Florida prices were in the $215-235 range, according to one of the players, and $220-222, according to another. One Tampa supplier reported prices at $215-225, while another $208-220 fob.
Gulf coast commentary
Gulf coast wholesale
prices were stable last week. There is no wholesale asphalt available from the
western Gulf coast. One western Gulf coast refiner is currently producing fuel
oil, while another has been using asphalt volumes within its own system.
There were a few wholesale deals done in the eastern Gulf coast. One supplier reported selling 210,000-215,000 bl of PG 67-22 at delivered prices that were in the upper $150s to $183. The supplier stated that fob equivalent prices were in the $156-157 range. There was one fob transaction done in the eastern Gulf coast for 55,000-60,000 bl. The price was $155 fob and the grade was PG 67-22. All sales from the eastern Gulf coast are expected to move in December. The parcels will be delivered within the Gulf coast to the east coast of Florida.
A buyer reported purchasing two cargoes of 55,000-60,000 bl on a delivered basis from the eastern Gulf coast. The fob equivalent price was reported to be in the mid-$150s. One parcel is expected to move this week, with the second was to move around the 15 December. Both parcels will remain in the Gulf coast.
Last week, a Gulf coast wholesale buyer purchased a parcel of PG 64-22 from the Midwest at $145-147 fob the Midwest. The parcel was to be delivered into the western Gulf coast.
Gulf coast wholesale buyers commented that at the current retail prices, they require wholesale parcels to land at prices no higher than $170-175 delivered.
Cooler temperatures slowed down asphalt retail activity in the Gulf coast. Current retail market prices were reported to be flat for remainder of December.
Southern Alabama prices were reported to be at the $220-230 fob level for PG 67-22, while southern Mississippi prices were heard at the $200-225 fob level.
Southern Louisiana rack prices were at $215 for PG 64-22, according to one local player. Another southern Louisiana supplier reported prices at $195 fob for PG 64-22. Quotes for next year have been at the $240-250 fob level for PG 64-22 in southern Louisiana.
At the December Texas letting, there was less work tendered than at the previous two lettings. One supplier reported its quotes for next year to be at $260 for PG 64-22, $360 for PG 70-22, and $380 for PG 76-22. The supplier stated that it had $20 esclators on all asphalt grades.
One Texas supplier reported that it did not quote any prices at the Texas letting. The supplier reported that it has had more and more success using daily rack prices instead. The supplier reported that its current prices were at $250 fob for PG 64-22. The supplier's PG 70-22 and PG 76-22 prices were at $330 and $310, respectively, for December sales.
Midwest commentary
Midwest wholesale
asphalt prices remained in the $140-160 fob range for PG 64-22. One local
supplier commented that the wholesale range was mostly at the $145-155 fob
range, with the majority of deals at the upper end of this range. One supplier
commented that it had some deals at the $160, and a few deals as high as $165
fob level.
A Midwest refiner reported selling a 70,000-75,000 bl parcel of PG 64-22 in the low $150s on a fob basis. The supplier said the parcel will move in two pieces by late December to early January.
At least one Midwest refiner sold some volumes slightly below $140 fob. These deals were considered to be special circumstances.
One Midwest refiner was still offering wholesale asphalt for delivery into the Gulf coast market. According to Gulf coast buyers, these prices were at the $145-147 fob level for PG 64-22.
Midwest refiners reported several requests for wholesale volumes from buyers in the Rockies and West coast region. The buyers were willing to pay higher prices and higher freight rates in return for guaranteed wholesale supply from the Midwest. One or more of these buyers purchased additional volumes for movement by rail in December. These wholesale prices were reported to be at $155 fob the refinery.
Tightness in the availability of flux wholesale asphalt caused concern among Midwest buyers. Flux prices were under pressure as suppliers evaluated their costs to make roofing flux material. The roofing flux wholesale price was reported at $180-260 fob for December sales.
Asphalt liftings slowed down tremendously with the onset of cold winter weather in the region.
The Midwest retail market for asphalt was very stable. Quotes for next year have been in the $200-250 fob range for PG 64-22. Marketers commented that there is nothing being quoted under the $200 fob level.
The Oklahoma and Kansas markets were at $240-250 fob for December daily rack prices, according to one local marketer.
Retail prices were holding across the region. Chicago, Illinois prices were at $160-175 fob. Quotes for next year have been at around the $200-210 fob level in the Chicago market. St. Louis, Missouri prices were at $175-180 fob, with quotes for next year around the $220 fob level. Detroit, Michigan retail prices were at $200 fob for PG 64-22, with a $10 premium for PG 58-28.
Frontier Oil sold its Grand Island, Nebraska terminal to Sym Materials.
Rocky Mountain & west
coast commentary
There were no
changes in Rocky Mountain wholesale asphalt prices. Buyers reported that Rocky
Mountain suppliers are sticking to supplying their regular customers and are
turning down new customers. Some buyers have had to seek wholesale volumes from
other markets such as the Midwest. Offers from the Midwest for rail delivery
into the southwest section were heard at the $155 fob level.
Rocky Mountain wholesale buyers reported Rocky Mountain wholesale prices to be unchanged from the prior week. One buyer said it was lifting volumes in December at the $145 fob level for PG 64-22. A wholesale supplier reported its prices to be unchanged from the $155 fob level.
Historically, the Rocky Mountain region has been the source of the lowest winter-fill prices in the US. But the addition of cokers in the region promises to change the availability of regional asphalt. One more refiner — Frontier Oil — announced coker expansion plans for its Cheyenne, Wyoming refinery.
There has been no bidding activity of any significance in Wyoming or Colorado. Quotes for the 2006 paving season were heard at the $210 fob level for PG 64-22.
Oregon had a bid on 8 December with a few jobs requiring completion by October 2006. One job called for 2,225t of PG 64-22 and 555t of PG 70-22 for paving in Marion county. Another job required 806t of PG 64-22 for paving in Linn county. Quotes were heard around the $240 fob level for PG 64-22. One supplier quoted an $8 premium for PG 70-22 over PG 64-22, while another quoted the same $240 fob price for both.
Current market prices in Oregon are in the $195-220 fob range for PG 64-22. One local marketer commented that any new sales for current movement would be at the $220 fob level.
California saw sporadic rainfall in the past week, which adversely affected asphalt liftings. Northern California prices were reported to be $300 fob for December, softer than the $325 fob prices heard for November. The drop was reported to be due to one local marketer reducing prices to reflect an earlier reduction in crude prices. Since crude prices have risen since the price decline, marketers said asphalt prices may rise in the short term to reflect higher crude costs. Southern California paving prices were unchanged at $325 fob for AR-4000 and AR-8000.
One northern California supplier reported quoting $350 fob for roofing flux for January, saying the regional flux tightness has resulted in several calls from buyers outside its traditional circle of buyers.
In Phoenix, Arizona, prices were at $250-260 fob for PG 70-10 and PG 64-16. Tucson, Arizona prices were at $240-260 fob. Nevada prices were at $275 fob for conventional asphalt, said one local participant.
Alaska prices were at $360 fob for PG 52-28, while the Hawaii market was at $350 plus for PG 64-16.
Canada commentary
Eastern Canadian
buyers said the winter-fill market has been quieter than in previous years,
with imports into the Ontario market at around the C$220/t delivered price
level for PG 58-28.
Snow and low temperatures brought asphalt liftings to a standstill in sections of eastern Canada. In Quebec, cold temperature has caused most of the plants to shut down for the winter. Last prices in this market were reported to be at the C$257-262 fob for PG 58-28.
In Toronto, Ontario there was some paving activity reported, but marketers said volumes were down substantially, as expected for the time of the year. Prices were unchanged from C$280-285 fob for PG 58-28.
There has been limited bidding in western Canada. However, increased bidding activity is expected in the next couple of weeks. One marketer pointed out that included in the upcoming jobs will be the ring road around Calgary. Another two sections of the Anthony Henday project in Edmonton is also scheduled to be bid soon.
One western Canadian supplier said it has not been offering any wholesale asphalt for export to the US and that wholesale sales have been limited to domestic sales. Procuring railcars continues to be an issue in the western Canadian market, and one marketer said it will be an issue in the region for the foreseeable future.
The season is not yet over in all west Canadian provinces. There is still some small volume liftings in the southern Alberta market.
One local wholesale supplier stated that it has been moving towards minimal operating inventories by year end. The supplier stated that it did not have any excess supply available to cause any distress wholesale pricing. Wholesale prices from Canadian sources were reported to be in the US$145-160/st fob range for conventional grades.
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