New York, 7 August (Argus)
US
East coast
East coast wholesale prices for PG 64-22 were reported to be unchanged from the $340-350/st fob range. With this range, the east coast fob prices were almost at parity with the Gulf coast fob wholesale prices. Even though marketers were aware of wholesale prices softening in the Midwest market, there was no softening observed in the east coast wholesale asphalt market.
At least one western Gulf coast supplier was moving wholesale barge volume to the east coast. The supplier was only offering wholesale asphalt into the Gulf coast when weather related factors (such as hurricanes) forced it to do so. PG 64-28 wholesale prices were at $347-357/st fob east coast refiners.
One east coast refiner sold 60,000 bl of flux at $425/st fob by barge. The supplier stated that it could sell an additional parcel in August, if it had transportation equipment available. But the supplier added that its next shipment for August would most likely be at the $435/st fob price.
East coast buyers felt that the supply situation is not as tight as was expected a couple of months ago. But there is lingering concern that asphalt supply could still get tight in the peak paving months of August-October.
Aside from a few retail price adjustments, retail prices on the east coast were mostly at $380-400/st for PG 64-22, with some prices as high at $410-425/st fob, depending on the market.
A western New York supplier had its reference price at $350/st fob for PG 64-22. Another supplier reported its selling price range to be at $340-350/st fob. Quotes in this market have been index-related, but one marketer reported having made no new quotes recently.
A Pittsburgh, Pennsylvania, supplier had its reference price at $350/st fob, with quotes for next year index-related. Asphalt prices in eastern Pennsylvania, Maryland and New Jersey were reported to be at $380-390/st fob. Northern New Jersey prices were at $390/st, with one supplier offering no exception to this price.
One east coast supplier raised its retail prices in inland North Carolina, coastal North Carolina and coastal South Carolina by $15/st to $410/st, $400/st and $400/st, respectively. Another east coast supplier raised its prices in Wilmington, North Carolina from $385/st fob to $400 fob/st, effective from 1 August. One supplier commented that with volumes mediocre at this level, the price market for asphalt could be reaching a point of stability.
In Atlanta, Georgia, one supplier raised its prices by $15/st to $425/st fob for PG 64-22, effective from 1 August. On 3 August, another Atlanta supplier raised its prices by $15/st to match the $425/st fob price from its competitor. One marketer pointed out that with the Georgia index at $385/st fob, some deals are still getting done at that level.
One Savannah, Georgia, supplier raised its prices from $395/st fob to $400/st fob for PG 67-22. One Jacksonville, Florida, supplier reported its prices at $400/st fob. Another local supplier reported its prices at around $410-414/st. In Tampa, prices were as high as $400/st fob from one local supplier. Another supplier had its prices at $395-392/st fob. Southern Florida prices were at $405/st fob.
Gulf coast
Demand for wholesale asphalt remained strong in the Gulf coast market. Refiners stated that there were some enquiries for supply from upriver buyers, but most of the buying interest was from Gulf coast states. The softening of midwest wholesale prices last week did not have any downward impact on Gulf coast wholesale prices owing to strong local demand and relatively tight wholesale asphalt supply.
There was some additional wholesale asphalt available from the western Gulf coast market, with around 65,000 bl of PG 64-22 loaded onto a ship for movement to South America. The price was heard at $340/st fob.
One western Gulf coast supplier did not expect to have any additional wholesale asphalt to supply until September. The supplier stated that its wholesale offers might increase over the next couple of months if movements to the east coast get affected by weather (hurricane-related shipping disruptions).
There were no additional sales from the eastern Gulf coast. An eastern Gulf coast refiner stated that it had no additional barrels to supply in the first half of August. Last wholesale prices from the eastern Gulf coast were at $332-334/st fob for PG 67-22.
One midwest refiner was offering wholesale barges for delivery to the Gulf coast at $305-310/st fob for August delivery. This price was reported to be equivalent to a $335-340/st fob price from a Gulf coast refiner. There did not appear to be any deals completed at the end of last week.
Very hot weather conditions hit the Gulf coast states last week. Marketers showed concern that if the weather remained hot, crews would be unable to work, causing delays on some jobs. Retail prices continued to firm in Gulf coast states.
One Alabama supplier raised its prices in the northern and central section of the state to $390/st fob for PG 67-22. A southern Alabama supplier was reported to be at $395/st fob. One southern Mississippi supplier raised its prices for PG 67-22 by $10/st to $385/st fob, effective last week. PG 76-22 was reported to be at a $100/st premium over PG 58-28 in southern Mississippi and in Alabama.
A southern Louisiana supplier reported its daily rack prices at $345/st fob for PG 64-22. The supplier stated that its PG 76-22 prices were at $430/st fob for its daily racks. Another southern Louisiana supplier reported raising its rack prices to the $350/st fob level for PG 64-22.
A Texas supplier raised its daily rack prices for Houston and Corpus Christi for PG 64-22 by $15/st to $400/st fob, effective from 1 August. The supplier stated that it was not quoting at lettings, and continued to provide only daily rack prices to its customers.
Volumes moving from Oklahoma into northern Texas and into the Dallas/Fort Worth metroplex area were at $375/st fob Oklahoma, effective from 1 August. This represented an increase of $25/st for PG 64-22. The supplier reported that there was volume lifting at that level.
A New Mexico supplier stated that the market was very tight on asphalt. The supplier had a daily rack price of $375/st fob for PG 58-28, while modified PG 64-28 was at $450/st fob.
Midwest
At least two midwest wholesale barge suppliers dropped their prices to the $305-310/st fob range for PG 64-22. Another midwest wholesale supplier stated that it lowered its barge prices to the $325/st fob level to match its competitors. Hence, wholesale barge prices in the midwest fell from the $315-340/st fob range to $305-325/st fob. But rail wholesale prices remained firm with prices unchanged at the $330-340/st fob level for most PG 64-22.
One midwest refiner dropped its wholesale barges prices to $305-310/st fob for PG 64-22 for August delivery. With around $30/st freight to the Gulf coast, these prices were competitive with the current $335-340/st fob wholesale prices in the Gulf coast market.
A midwest buyer confirmed that it purchased a two barge tow consisting of 32,000 bl of PG 64-22 from another Midwest refiner at $305/st fob. The volume was for movement within the Midwest region.
Higher asphalt production levels from one refiner, and temporarily excess supply at another (owing to low water levels on the Missouri limiting access to certain terminal locations) were reported to be the main reasons behind the price slippage. The widening light-heavy Canadian crude prices spread may have also contributed to the lower wholesale pricing. For example, WTI vs. Lloyd Blend widened to $22.56/bl last week from $17.68/bl the week before.
In the lower midwest, one rail wholesale supplier raised its prices from $300/st in late June/early July to $350/st fob for August. The supplier stated that it was still selling wholesale asphalt into the Rockies market, but lost buyers in the southwest section of the US. The delivered prices were too high for some of these buyers to break even at current retail prices.
Midwest retail prices were relatively stable. But there were some slightly softer prices heard in certain markets. In the Chicago, Illinois, area, one supplier stated that its date-of-shipment prices dropped to the $325/st fob level. One or more suppliers in the area were reported to have rolled forward their earlier contracts. At least one marketer in the area stated that its sales had fallen significantly.
In Oklahoma, one supplier raised its prices by $25/st to $375/st fob for PG 64-22. This also applied to Oklahoma volumes that were moving into the Texas market. In Kansas, the market was reported to be balanced, with new sales at the $350-375/st fob range for PG 64-22. One supplier stated that it did not need to sell any more volumes in the market.
In northwest Indiana, truck rack sales were at $365/st fob. In Indianapolis, Indiana, one supplier had its reference price at $360/st fob, with sales at that level. Quotes for PG 64-22 were at $390-405/st fob for PG 64-22. PG 58-28 was reported to have a $30/st increase over PG 64-22.
A Detroit, Michigan, supplier reported its last quotes at $380-400/st for PG 64-22, with a $25/st differential for PG 58-28. The supplier had a reference price of $360/st fob for PG 64-22.
In northern Ohio, prices were at $365/st fob. Another supplier stated that its reference prices in northern Ohio were at $375/st fob, with quotes for this year at $400/st fob for PG 64-22. Southern Ohio prices were at $375/st fob for PG 64-22.
In central Illinois, prices were at $380/st fob. In Minneapolis/St. Paul, Minnesota, one supplier had its reference price at $340/st fob.
A western Kentucky supplier had a reference price of $395/st fob, and reported that it was quoting the state index for new jobs. Volumes moving this year from Kentucky to Illinois were priced at $460/st not-to-exceed, with a floor of $380/st fob. In eastern Kentucky, one supplier was at the $375/st fob price.
Memphis, Tennesse, prices were at $370/st fob, while Louisville and Knoxville were at $385/st and $400/st, respectively. Chattanooga prices were $400/st fob for PG 64-22.
Rocky Mountain & west coast
Rocky Mountain wholesale prices crept up from $285-325/st fob the week before to $290-330/st fob last week. Buyers reported that prices were up for the month of August, as refiners continued to have limited availability of wholesale asphalt and strong rack liftings.
One buyer that was purchasing rail volume from a Rocky Mountain refiner at $325/st fob in July stated that its August price was raised by $5/st to the new $330/st fob price. The buyer stated that it continues to get month-to-month wholesale pricing from its supplier.
Buyers reported that wholesale supply availability from the Rockies does not appear to be as tight as it was a few months ago. Nevertheless, suppliers reported that they have nothing new to sell in the open market, and are selling only to their existing customers.
Wholesale suppliers are only supplying those buyers that already have wholesale contracts — those buyers that do not have contracts or buyers who need additional wholesale volumes are finding that they have to obtain wholesale asphalt from other US regions. Some of these buyers have been seeking volumes from the US midwest.
While US midwest wholesale prices dropped from a couple of wholesale suppliers for barge volumes, rail wholesale sales remained at the $330-340/st fob range from PG 64-22. In the lower midwest, one rail wholesale supplier raised its prices from $300/st in late June-early July to $350/st fob for August. The supplier stated that it was still selling wholesale asphalt into the Rockies market, but lost buyers in the southwest section of the US. The delivered prices were too high for some of these buyers to break even at current retail prices.
Asphalt retail prices in Montana were at $350/st fob for PG 58-28, while in Wyoming and Colorado, asphalt retail prices were at $410/st fob for PG 64-22 and PG 58-28. Old contracts in these markets are in the $200-210/st fob range. PG 64-28 was heard at around the $460/st fob range in Wyoming and Colorado, while PG 76-28 was at around the $500/st fob level.
The Utah market remained extremely tight on asphalt. With interregional rail volumes landing in this market at $425/st delivered, the retail prices were reported to be reaching $450/st plus on a fob basis for conventional asphalt.
In Portland, Oregon, one or more suppliers sent out notification letters to their customers informing them that rack prices would be raised from the $375/st fob level to $400/st on 1 August. PG 70-22 was reported to be priced at $10/st higher than PG 64-22.
The southern California market was reported to be at $390-400/st fob, according to one local participant. Market sources say asphalt prices were under pressure to move up. One supplier increased its prices to the $415/st fob level for PG 64-10 and PG 64-16 at a terminal located north of Los Angeles. The supplier increased its PG 64-10 price to $415/st, and its PG 70-10 to $425/st fob. PG 64-16 that is used with rubber products moved to the $420/st fob level.
In Arizona, Phoenix, prices were at $400-450/st for PG 70-10. Suppliers in this market were seeking wholesale asphalt from various sources within the Rockies in from the midwest. But the recent rise in wholesale rail prices caused these buyers to seek wholesale rail asphalt from other sources.
Canada
An eastern Canadian refiner announced a posted price increase of C$5/t for Montreal, Quebec, which was to take effect on 1 August. With this increase, the refiner’s posting for PG 58-28 would have increased to C$502/t. But by 4 August, the supplier readjusted its posted prices back to the C$497/t fob level for PG 58-28. Premiums for PG 64-28 and PG 58-34 remained at C$30/t and C$60/t over PG 58-28. Local marketers pointed out that PG 64-34 had a C$120/t premium over PG 58-28.
The retail market in Montreal was reported to be at C$485-490/t fob for PG 58-28. But local marketers reported that prices were under pressure from high local asphalt inventories and signs of price softening in midwest wholesale prices.
Quebec marketers pointed out that demand has been affected by the significant amount of rainfall in the region, causing asphalt inventories to rise. The news of two midwest refiners offering lower wholesale prices to midwest buyers caused eastern Canadian marketers to believe that the import parity price into eastern Canada was about to drop, and with it the retail prices in the eastern Canadian market. Marketers pointed out that if these lower prices are offered into eastern Canada, the retail prices could face downward pressure by this week.
The Ontario asphalt market was reported to be at C$485-500/t fob level, with the bulk reported to be at C$490/t fob. One supplier stated that only very small accounts were at the C$500/t fob level for PG 58-28.
The western Canadian market has seen strong paving activity because of good paving weather conditions. If the weather holds, local marketers expect to be very busy over the next couple of months as they attempt to finish all the work that is on the books.
Last quotes in Alberta for Pen 150-200 were at C$430-450/t. In Manitoba, netbacks to the refinery gate on recent jobs were at C$500-505/t. The higher asphalt prices in Manitoba were a result of limited asphalt supplier participation in this market.
There was no new wholesale supply available from western Canadian sources. At least one refiner was finished with its wholesale supply contracts and did not plan on offering any more wholesale asphalt for this paving season.
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