East coast
The East coast wholesale market was quiet as most buyers have adequate asphalt inventories for the start of the season. Last transactions were in the $245-250/st fob range. But suppliers stated that they will require a higher wholesale price when the market picks up, especially if crude prices remain strong and light-heavy differentials remain narrow. Last wholesale flux transactions from an export source were at $260-270/st delivered into the Midatlantic market.
An East coast refiner was in turnaround to expand its capability to handle more vacuum tower bottoms. The refiner stated that it is watching crude prices and the light-heavy differential, and it may decide to run a lighter crude slate.
The retail market was relatively quiet in the East coast as cooler temperatures slowed done liftings. One supplier in Richmond, Virginia, reported dropping its price from $325-330/st to $300-310/st fob for PG 64-22. The supplier stated that the drop was necessary as its prices were higher than the market, causing it to lose volume to its competition.
In the New England market, prices were stable as there has been limited bidding activity. Prices at the start of the asphalt season are expected to be higher than prices at the end of last year, primarily because of the strength in heavy crude oil prices.
A western New York supplier reported its current posted price to be unchanged at $315/st fob for PG 64-22. The supplier had a $25/st premium for PG 64-28. The supplier stated that its posted prices are its selling prices in the market, unless a customer is buying at the state index.
Most asphalt prices in the Midatlantic market were around the $300/st fob level for PG 64-22, with prices around $5/st lower in southern New Jersey. In the Carolinas, prices were reported to be holding at the $310/st fob level for PG 64-22.
In Atlanta, Georgia, the market was holding at $305/st fob, while Savannah prices were at $290/st fob for PG 67-22. In Florida, Tampa and Jacksonville, Florida prices were unchanged at $285/st fob. Prices in Pensacola, Florida, were slightly higher at $300/st fob for PG 64-22.
Gulf coast
Valero LP, Valero Energy’s petroleum pipeline and terminal operations, has a new name, NuStar Logistics LP, to reflect its separation from Valero Energy. The newly-formed NuStar will be headed by ex-Valero Energy chief executive Bill Greehey.
Gulf coast wholesale asphalt prices remained at around the $215/st fob level for PG 64-22 and PG 67-22. One supplier stated that it was attempting to determine what its wholesale prices should be for the start of the paving season. Inclement weather conditions in several surrounding markets kept demand and buyer interest down.
But asphalt suppliers in the Gulf coast are expecting a surge in wholesale buying interest in May when buyers come seeking replacement wholesale barrels.
Retail prices were relatively stable in the Gulf coast market. The southern Alabama market was mostly at $300/st fob for PG 67-22. One local supplier was at a higher price in southern Alabama, but was priced out of the market. Northern and central Alabama prices were unchanged at $325/st fob for PG 67-22.
In southern Mississippi, one supplier reported its prices to be at $315/st fob for PG 67-22. Specialty grade PG 76-22 had a $100/st premium over PG 67-22. Central Mississippi prices were slightly higher at $325/st fob for PG 67-22. In southern Louisiana, the market was reported to be holding at around $320-325/st, according to one player.
A fire at a west Texas refinery contributed to the tightness in the New Mexico market. Sources stated that the refinery could be down for six months to a year, which could impact midcontinent and west coast asphalt rail supply.
Southern Texas prices were stable at $275/st fob for PG 64-22. Volumes moving from Oklahoma into the Dallas/Fort Worth market were at $275-300/st on a fob basis for PG 64-22.
Midwest
The Midwest asphalt season is still a couple of weeks from starting up. Inventories are higher in suppliers and buyers tanks, causing prices to remain stable. But local participants stated that if crude oil prices remain high and light-heavy crude differentials remain narrow, prices could come under pressure as inventories become depleted and marketers start seeking replacement barrels.
The retail premium for PG 58-28 over PG 64-22 is $30/st, according to Midwest participants. One supplier stated that if it did not get this premium, it would not sell the grade.
The Oklahoma retail market was reported to be in the $275-310/st fob range for PG 64-22, while the Kansas market was reported to have some prices at the $280-290/st fob level for PG 64-22.
In the Chicago market, retail prices for the start of the season were reported to be around $315-325/st based on older work already on the books. But one supplier stated that it was signing up work for July at the $335/st, plus or minus $5/st, level. In St Louis, Missouri, the market was reported to be at $280-290/st fob for PG 64-22. One supplier stated that the price was at this level because of index-based pricing.
In Minneapolis/St Paul, Minnesota, one supplier had its posted and selling prices at $320/st fob. But the supplier stated that it was not actively quoting in this market.
In central Illinois, at least one supplier was quoting the state index for state work. One supplier stated that it was selling asphalt at $340/st fob and was quoting the state index at lettings. At another location, the terminal was still heating up for the start of the season. The supplier was quoting the index, but had not shipped any volume.
A Detroit, Michigan, supplier was at $340/st fob for PG 64-22. The supplier stated that its quoted prices were at its current sales price.
Indianapolis, Indiana, prices were stable at $330/st, while in southern Indiana, prices were at lower at $307/st for PG 64-22. One supplier stated that its northeast Indiana quotes were at $330/st firm, down from its previous quotes of $350/st firm
In northern Ohio, the reference price was reported to be at $315/st. One supplier stated that it was quoting work at $360/st not-to-exceed through to May, and was at $390/st not-to-exceed through to July. The supplier had a $425/st not-to-exceed price through to December.
In Cincinnati, Ohio, prices were at $295/st fob for PG 64-22, while Chattanooga, Tennessee prices were at $290/st fob. In western Kentucky, one supplier was quoting the state index and the Illinois index, depending on the job. The supplier’s reference price was dropped by $10/st from $325/st to $315/st on a fob basis.
Rocky mountain & west coast
While crude prices have strengthened and light-heavy crude spreads narrowed, wholesale asphalt prices in the Rocky Mountain region have remained stable. The main explanation for this is burgeoning asphalt inventories in the region. While not all suppliers are full, most are.
As a result, the US Rocky Mountain wholesale price range remained at $170-185/st fob. One regional buyer was purchasing wholesale asphalt at $170/st fob in April. This price was the same as its price the month before. Another Rocky Mountain supplier held its price at $185/st fob for its customers for March and April owing to slow local demand and competitive wholesale values.
Retail volumes are starting up in the Rockies, which has made suppliers cautiously optimistic that wholesale asphalt prices will adjust to cover production costs.
In Montana, most recent bids have been around $300-350/st fob for PG 64-22 and PG 58-28. One Montana supplier is certified to sell paving grades into the Alberta market.
In Wyoming and Colorado, retail prices were unchanged from $340-350/st fob for PG 64-22 and PG 58-28.
In Wyoming, one supplier has a turnaround planned starting from 13 May for 26 days. The entire refinery will be shut down during this period. The refiner stated that all existing customers would be supplied from asphalt inventories, which have been built up.
There were no changes heard from Arizona, and the Phoenix market was at $340/st fob for PG 70-10. Tucson prices for PG 70-10 were slightly higher by $5-10/st. The Flagstaff market in northern Arizona had stable prices at $360/st fob for PG 64-22 and PG 58-28.
In Oregon, last prices heard for PG 70-22 ER (elastic recovery) were at $370/st fob, while PG 70-22 work was recently taken at $325/st fob. Asphalt liftings have picked up in the Oregon market.
A northern California marketer was reported to be around the $315/st fob level for PG 64-16 and PG 70-10. The central California market was stable at $300-305/st fob. Demand was reported to be moderately good.
The southern California market was reported to be slightly lower owing to greater competition. Grades PG 64-16 and PG 64-10 were at around $290-295/st fob, according to one source.
Canada
In the eastern Canadian province of Quebec, the first provincial bid for the new asphalt season will be on 12 April. The tender will cover work for the remainder of April and for May. Since this is the first tender for the 2007 paving season, it is being watched closely by local marketers seeking to get an idea of what the asphalt price picture may look like for 2007.
One Quebec supplier released its rack prices for the start of the new paving season. These prices, which took effect on 1 April, will remain in effect until 8 April. Because of higher production costs and higher heavy crude prices, the supplier raised its prices to C$452/t for PG 58-28, C$492/t for PG 64-28, and C$512/t for PG 58-34. PG 58-28 and PG 64-28 prices were C$157/t higher than prices at the end of last year, and PG 58-34 was C$172/t higher than at the end of last year.
Another Quebec supplier raised its posted prices, effective from 5 April. The posted price for PG 58-28 was C$462/t, PG 64-28 was C$502/t, PG 58-34 was C$522/t, and for PG 64-34 and PG 70-28, the price was C$572/t. These prices were C$7/t higher than prices at the end of last year.
The new posted prices maintained differentials, with PG 64-28 at a C$40/t premium over PG 58-28, PG 58-34 at a C$60/t premium, and PG 64-34 and PG 70-28 at a C$110/t premium over PG 58-28.
Another Quebec supplier moved to C$450/t, effective from 1 April.
Western Canada is only a couple of weeks away from the start of the asphalt season. Last prices heard in Alberta for Pen 120-150 were at around C$595/t.
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