East coast
East coast wholesale prices for asphalt remained stable. An east coast wholesale buyer reported buying 65,000 bl of PG 64-22 from a mid-Atlantic refiner at $345 fob for delivery in the last week of August. The buyer said it had agreed to the date a few weeks ago, but the price was determined last week. The price was unchanged from previous deals.
Roofing flux wholesale prices remained steady on the east coast as buyers searched for alternative supply sources following a fire that shut Venezuela’s flux-producing 635,000 b/d Amuay refinery. One wholesale flux buyer reported purchasing wholesale asphalt from an export source at $360 delivered to the east coast.
An east coast refiner sold two volumes of flux, totalling 60,000 bl, at $425-435 fob last week. The product will move in the last part of August for delivery to the midwest. The supplier said that after this transaction, it had no more flux available for August. But the supplier expects to have flux available for September.
There were no significant changes reported in rack prices on the east coast. One Portland, Maine, supplier reported its prices at $405 fob for PG 64-28. In southern Connecticut, one supplier reported prices for PG 64-28 at $390-410 fob, exclusive of the gross receipts tax. Massachusetts prices were in the same $390-410 range. High wholesale delivered prices for PG 64-28 were the main reason for the price strength.
In eastern New York, asphalt prices were reported at levels of $380-400 on a fob basis for PG 64-22. One north-central New York supplier had its prices at $370-380 fob for PG 64-22. In western New York, one supplier’s reference price was unchanged at $350, with sales at that level.
In Pittsburgh, Pennsylvania, one supplier was selling asphalt at its reference price of $350 fob. In eastern Pennsylvania, Maryland and New Jersey, asphalt prices were reported to be unchanged from the $380-390 fob range reported last week. Virginia prices were heard at $390-400 fob for PG 64-22.
In inland north Carolina, prices were reported to be as high as $425. Pries along the coast of North Carolina and South Carolina were reported to be as high as $415 fob for PG 64-22.
In Atlanta, Georgia, prices moved up to $425 fob for PG 67-22, effective from 1 August. Along the coast, Savannah prices were as high as $400 fob. In Florida, one supplier raised its Tampa prices from the $390s to $397-400 fob for PG 64-22. Southern Florida prices were at $405 fob.
Gulf coast
Gulf coast asphalt wholesale suppliers continued to see strong demand for asphalt from Gulf coast buyers and from the Florida market. There were no new midwest wholesale sales to the Gulf coast as the price difference between the regions was equal to the transportation cost. Additionally, the lack of spot barges made these movements difficult.
An eastern Gulf coast supplier sold 40,000 bl of PG 67-22 for delivery this week to a Gulf coast location. The price was $347 delivered, which gives a fob equivalent price in the mid-$330s. The supplier said it believed that the market was largely unchanged from the previous week. Prior to this deal, an east Gulf coast supplier sold 10,000 bl of PG 52-28 at $365 fob.
A west Gulf coast supplier sold PG 64-22 at $340 fob for delivery to the east coast. The volume loaded last week. One west Gulf coast supplier reported selling some volumes previously at the $340-345 fob range.
Gulf coast marketers experienced hot weather conditions during last week. Gulf coast marketers said there are signs that the increase in asphalt prices this year has started to take its toll on asphalt demand. One Texas asphalt marketer argued that asphalt demand in the state appears to be down by around 20pc this year compared with earlier expectations.
There were no price changes heard from the Alabama market. Northern and central Alabama prices were at $390 fob for PG 67-22, while southern Alabama prices were at $390-395 fob. Southern Mississippi prices were heard at $385 fob. One southern Louisiana supplier was holding prices at the $345-350/st fob level for PG 64-22.
The southern Texas market was reported to be at $390-400 fob for PG 64-22. One supplier at the $400 fob level reported that it was still not quoting any lettings, and preferred to only provide date-of-shipment prices for asphalt. Volumes moving from Oklahoma into the Dallas/Fort Worth market were priced at $375 fob for PG 64-22. The west Texas market was reported to be at $400-425 fob, with volumes signed up at the upper end of the range.
In Texas, specialty grade PG 70-22 was reported to be at $460, while PG 70-28 was at $485-490/st on a fob basis.
Arkansas prices were reported to be at $375 fob for PG 64-22 volumes lifting in August. This price applied to volumes moving into northern Texas and the northern Louisiana market. One Arkansas supplier said it is considering adding a $10/month escalator until the end of the year, which would be cumulative, making October prices $395. The supplier said the escalator would be implemented depending on market conditions.
Arkansas prices for PG 70-22 had a $90 premium to PG 64-22, while PG 76-22 had a $120 premium to PG 64-22. The same $10/month escalator until the end of 2006 is applicable to these premium grades as well.
Flux prices from an Arkansas supplier for delivery into Texas, Missouri and Arkansas were $350 fob. The supplier said it would make a final pricing decision at the end of this week, but preliminary indications are that the September flux price will rise to at least $365 fob.
Midwest
Midwest wholesale barge prices were unchanged from the prior week’s $305-325 fob range for PG 64-22. PG 58-28 barge prices were reported to have a $30 premium to PG 64-22. One buyer reported purchasing PG 58-28 at $350 fob from a midwest refiner. Preliminary September barge prices were reported to be at $305-320 fob for PG 64-22.
Midwest wholesale rail prices continued to be mostly in the $330-340 fob range for PG 64-22. One buyer reported purchasing midwest rail volumes at $290-300 fob for August. The buyer said these volumes were for on-specification product for August delivery.
Midwest refiners reported receiving enquiries for flux or soft asphalt grades that could be blended to produce flux. Requests for supply were from local buyers and east coast flux buyers that were concerned about flux import availability to the east coast following a fire that shut down Venezuelan state-owned PdV’s 635,000 b/d Amuay refinery.
Several large buyers in the midwest and across the US are concerned about winter-fill availability and pricing for the 2006-07 winter. Some of these buyers are scheduling meetings with suppliers in an attempt to tie-up volumes to guarantee supply availability over the winter. With most suppliers attempting to enter the winter season on tank bottoms, some of these buyers are concerned that there will be little or no winter-fill offered.
Retail prices are in a wide range in the midwest. But prices have been firming as older contracts are completed and new contracts come into effect.
Oklahoma prices were heard at $375 fob for PG 64-22. PG 70-22 and PG 76-22 were at $460 and $485-490 fob, respectively. PG 70-28 was at $485-490 fob.
One Chicago marketer reported its truck rack date-of-shipment prices to be $325 fob for PG 64-22. One central Illinois supplier had its prices at $380 fob. One Illinois marketer reported that owing to its terminal’s proximity to the Chicago market, its prices were at $365 fob for PG 64-22, with a $10 premium for PG 58-28. The supplier was at $415 not-to-exceed with a $375 floor for future quotes, and had a $10 premium on quotes for PG 58-28. In northwest Indiana prices were at $360 fob for truck rack date-of-shipment sales.
One Detroit, Michigan, supplier reported its reference price at $360 fob for PG 64-22, with sales at that level. Quotes were at $380-400 for PG 64-22, with a $25 premium for PG 58-28.
Northern Ohio day-to-day shipments from one supplier were at $375 fob, while another supplier reported its date-of-shipment prices to be at $370 fob.
In eastern Kentucky, prices were at $375 fob. Western Kentucky prices were at $395 fob. Memphis, Tennessee, prices were at $370 fob, while Louisville and Knoxville were at $385 and $400, respectively. Chattanooga prices were reported to be holding at $400 fob for PG 64-22.
Rocky mountain and west coast
Rocky Mountain wholesale asphalt suppliers reported that the market is not as tight as it was a month ago. One refiner said its refinery unit problems have resulted in unexpected asphalt inventory that it may be offering into the wholesale market.
Asphalt wholesale rail prices were unchanged from the $300-330 fob range for PG 64-22. Some wholesale deals were as high as $350 fob. Rocky Mountain refiners continued to only offer wholesale asphalt to their traditional buyers.
There is plenty of asphalt work to be done in the Rocky Mountain region, and marketers expect to be busy during September and October, which are historically the highest demand months in the region. Marketers pointed out that some new construction work, which has been held up because of rainfall, will most likely pave in the next couple of months.
In Montana, asphalt rack liftings were in the $290-340 fob range for PG 64-22, with the lower end applying to older contracts. Unmodified asphalt is being quoted for the 2007 paving season at $365-395 fob for PG 64-22.
In Wyoming, the Department of Transportation is trying to determine if next year’s jobs should be tendered this year or after the New Year. Local suppliers would rather have the jobs released this year, as has been done in prior years, so that they have a clearer indication of volumes for next year.
Asphalt retail prices in Wyoming were $410-450 fob for PG 64-22 and PG 58-28 for new paving quotes for next year. New work for this year was priced at $390-410 fob in Wyoming and Colorado. One local supplier said it has started quoting jobs that will pave later this season as it has additional unanticipated asphalt inventory.
Old contracts in the Wyoming and Colorado markets were in the $200-210 fob range. PG 64-28 was at $460 fob, while PG 76-28 was at the $500 fob level.
The Utah asphalt market remained extremely tight. With interregional rail volumes landing in this market at $425 delivered, the retail prices in this market were reported to be reaching over $450 on a fob basis for conventional asphalt.
On 1 August, Portland, Oregon, prices were raised to $400 fob for PG 64-22. But local marketers pointed out that the market is not there yet, and the Portland market has a range of $375-400 for PG 64-22 for August. Competitive pricing to the larger contractors was the main reason behind the price erosion.
In northern California, asphalt prices remained at $355 fob for PG 64-10, PG 64-16 and PG 70-10. High stocks have kept the market at a lower level than suppliers have been seeking in the region.
Central California prices were $345 fob. The southern California market was at $360-400 fob for PG 64-10 and PG 64-16, according to one local participant.
Winter-fill discussions are expected to start by October. One winter-fill buyer said it expected volumes to be available, but the unknown factor was pricing.
Canada
Despite perfect paving weather conditions in eastern Canada, some marketers commented that asphalt liftings appeared to be lower than expected for this time of year, particularly in the province of Quebec. One marketer commented that this could be because of high asphalt prices affecting the amount of provincial and municipal work that is tendered. With the strongest paving months for the region, September and October, around the corner, there is some concern about whether liftings will continue to taper off.
In Quebec, PG 58-28 asphalt prices were reported to be at C$463-468 compared with last week’s level of C$475-480/t. The price softening was reported to be because of ample inventories and marketer attempts to move these volumes out to ensure that they enter the winter season on tank bottoms. The softening of crude prices last week may have contributed to the price discounting.
New posted prices for Quebec were announced last week. One supplier raised its prices by C$5, while another dropped its prices by C$5-10, depending on the grade.
The Ontario market was reported to be in the C$490-500 range, with one supplier reporting prices to be mostly at the C$490 level for PG 58-28.
In western Canada, asphalt supply remained tight in Saskatchewan and Manitoba. Last prices reported from the Manitoba market were at C$540 fob for Pen 150-200. Last prices heard in Saskatchewan were at C$515/t fob the closest supplier.
Last bids in Alberta were back in June 2006. Prices at that time were around C$440 fob the closest supply source for Pen 150-200. The asphalt market in western Canada is tight, causing quotes for the remainder of this year to be higher than quotes for next year. Quotes for next year were reported to be at C$478-480 fob for Pen 150-200 in the Alberta market. But if any work were bid for the remainder of this year in Alberta, one supplier said its price would be at C$510/t for Pen 150-200.
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