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US east coast
East coast wholesale buyers reported that they had a comfortable level of inventories for December. Most of the wholesale buying interest was in the southeast market, where imported PG 64-22 paving asphalt volumes were reported to be landing in the mid-$220s on a delivered basis.
Wholesale buyers said they will require wholesale volumes in the first quarter of next year. But so far there have been no wholesale quotes heard from local refiners for early next year.
The East coast retail market continued to fall. In the last two weeks, most markets from New York to Florida softened by at least $10. One supplier said it was matching all price declines by its competitor to prevent losing its customer base. Local suppliers were taking advantage of the unexpectedly warm temperatures in late November, and were attempting to move out as much volume as possible before the weather turns cold.
In the New England market, prices slipped slightly with $370 reported to be the predominant price for PG 64-28.
Eastern New York asphalt prices slipped to around $310 fob for PG 64-22. Northern New Jersey prices slipped to $285, with southern New Jersey moving to the $280 fob level.
Baltimore, Maryland prices were at $285 fob, while northern Virginia was at $295 fob. Southern Virginia was also at $295.
Coastal north and south Carolina and the inland Carolinas were at $310 fob for PG 64-22. The biggest price drop in the region over the past couple of weeks was in the inland Carolinas market.
Atlanta, Georgia prices for PG 67-22 slipped from around $340 two weeks ago to $315 fob last week. Savannah prices were also lower, at $300 fob, according to one local player.
One Jacksonville, Florida supplier kept its prices unchanged at $315 fob, while another supplier lowered its prices to the $305 fob level. One Tampa supplier lowered its price to the $310 fob level over a week ago, while another dropped its prices to $297-300. Eastern Florida slipped by $15 to $305 fob.
One southern Florida supplier dropped its prices by $10 to the $325 fob level. Another southern Florida supplier dropped its prices by $12 in the past week to the new $305 fob level.
US Gulf coast
There were no new wholesale asphalt transactions in the Gulf coast market. Refiners said supply was available, but wholesale buyers appeared to have at least some winter-fill barrels in inventory. The majority of the buyers were attempting to delay any additional wholesale purchases as much as possible, in the hope that wholesale prices would decline further.
One Gulf coast refiner said export volumes of asphalt that were landing into Florida in the mid-$220s on a delivered basis were putting pressure on wholesale fob prices in the Gulf coast. The wholesale market for December was reported to be at around $205 for PG 67-22 or PG 64-22. This was slightly softer than the $210 level a couple of weeks ago. Crude cost volatility caused Gulf coast refiners to refrain from quoting any winter-fill prices beyond December.
One western Gulf coast supplier said it has no surplus asphalt to sell into the open market as wholesale asphalt. The supplier reported that strong paving demand was one of the main reasons behind its balanced situation.
Sporadic bad weather slowed paving asphalt liftings last week. But there is still work on the books and marketers reported that paving is still going on.
Retail prices were stable in the Gulf coast. In northern and central Alabama, asphalt prices were at $350 fob for PG 67-22, while southern Alabama were at $370 fob for PG 67-22. Southern and central Mississippi prices were at $350.
In southern Louisiana, prices were stable at $335 fob for PG 67-22. One supplier pointed out that prices in this market were unchanged for the past month. The relative strength in this market compared with neighboring Texas was reported to be the result of strong demand for paving asphalt. Additionally, at least one supply source was reported to be tight on asphalt.
In Texas, one marketer pointed out that prices have been relatively stable in the past couple of months. Along the Texas coast, prices were heard at $275 fob for PG 64-22. Further inland, prices were in the $275-290 fob range for PG 64-22.
In Texas, quotes for next year were heard at the $325-350 fob level for PG 64-22. One supplier said it was quoting the current $275 plus escalators for next year. Escalators were reported to be all over the board as they varied based on the job and the market participant.
In Texas, specialty grade PG 70-22 was at $335, while PG 76-22 was at $345 fob. One supplier said specialty grades in Texas were available at lower prices than in Oklahoma. This was due to cheaper modification costs in Texas due to the better quality asphalt.
US Midwest
Midwest winter-fill prices were heard in the $180-205 fob range for December sales of PG 64-22. Some buyers said most of the strength was at the $180-190 fob level. There was one report of a slightly lower price, but it could not be confirmed.
Midwest refiners are focussed on quoting prompt winter-fill prices. There continued to be a reluctance to quote prices beyond December, as suppliers were uncertain about what their crude costs would be in the New Year. Buyers, on the other hand, are hoping for more winter-fill availability after December and lower winter-fill prices.
There are still some older wholesale barge deals that are lifting that were done a couple of months ago. Those volumes will be moving at $270-280 fob range for PG 64-22.
PG 58-28 continues to carry a premium over PG 64-22 barge quantities, with prices around $15-30 over PG 64-22, with premiums depending on the supply source.
After a strong November, cold weather slowed asphalt liftings in the Midwest. One supplier said the season ended last week.
On the retail side, prices slipped in several markets with competition and a build up in inventories cited as the key reasons.
At the November Nebraska letting, quotes from Wyoming into Nebraska were at $390 fob for PG 64-22. Grand Island prices were at $380 fob for PG 64-22.
Recent quotes for next year’s work in North Dakota were in a range of $349-420 fob for PG 58-28. Recent quotes from northern Minnesota were at $430 fob PG 58-28. In Minneapolis/St Paul, Minnesota prices were lower at $295-300 fob range for PG 58-28.
In the Chicago, Illinois market, last prices were heard at the $325-340 fob for 2006 work. Current quotes for 2007 were reported to be at $365 fob. The St. Louis, Missouri market was reported to be at $300-315 fob for PG 64-22. Southern Indiana prices softened.
In Detroit, Michigan, one supplier reported its prices to be at $360 for PG 64-22, with sales at that level. In northern Ohio, one supplier reported 2006 prices at $340-350 fob for PG 64-22. Cincinnati, Ohio prices were heard at $295 fob for PG 64-22.
In northern Kentucky, prices softened from $325 two weeks ago to the new $300-310 fob range. Louisville prices were unchanged for the past month, with prices at $335 fob.
Memphis, Tennessee prices were at $340 fob, Knoxville was at $310, while Nashville was at $340-345 fob. Chattanooga prices slipped to the $310 fob level for PG 64-22.
US Rocky Mountain and west coast
Rocky Mountain wholesale asphalt prices widened from the $195-215 fob range two weeks ago to the new $180-210 fob range for PG 64-22 and PG 58-28 rail volumes.
One local refiner reported selling two 5,000t batches of PG 58-28 at the December winter-fill price of $200. One local refiner reported selling 2,000t of PG 58-28 for December delivery at $210 fob. One Rocky Mountain refiner said its rail volumes for December were holding in the $195-200 fob range. Another supplier was reported to be in the $180-185 fob range. One buyer reported that it was purchasing volumes below the $180 fob price. But the price could not be confirmed at press-time. West Canadian asphalt winter-fill prices were reported to be at prices that were competitive with the US Rockies.
Winter-fill asphalt suppliers said the market is adequately supplied, and there are no shortages. One supplier described the market as “adequate to slightly long” on asphalt compared with the shortages seen last year. But local suppliers warn that at least three cokers are scheduled for next year, which could decrease the availability of vacuum tower bottoms in this market and could lead to a reduction in the availability of winter-fill, in this traditionally well supplied winter-fill market.
Most of the current winter-fill volumes from the Rockies were moving to the west coast or the US southwest market. There were no winter-fill quotes heard for the start of next year.
Cold weather conditions in parts of the Rockies and west coast markets adversely impacted asphalt liftings. Some northern Rocky Mountain states haves seen their paving come to a grinding halt due to freezing temperatures.
Increasingly, Rocky Mountain suppliers are moving away from fixed future pricing on their retail contracts to contractors and instead are moving towards quarterly, monthly or even pricing on the date-of-shipment. One supplier said it plans to have a tiered method of pricing for next year. At least one supplier has informed its customers that it will be moving towards date-of-shipment pricing starting next year.
Montana has a bid letting this week with work for next year’s paving. Wyoming had a bid letting in November which called for 58-28 for 2007 paving. One local supplier bid the work in the low $300s on a fob basis. One local marketer said the supplier which took the work was $70-80 lower than the next supplier. One Wyoming supplier said it was quoting next year’s work at the $350-370 fob range for base and stationary plants. Another supplier reported its price at $380 fob for PG 58-28.
Utah prices were heard at $390 for AC-10. Las Vegas, Nevada prices were also at $390 fob for AC-30. Boise, Idaho prices were at $425 fob for PG 64-22.
In Portland, Oregon prices were holding at $330-350 fob for conventional grade, PG 64-22. According to a local player, PG 70-22 had a $10 premium over PG 64-22, while PG 64-28 had a $20 premium.
Northern California experienced cold, rainy weather last week. One local marketer said that, as anticipated, asphalt volumes in November were about half of October. The northern California market was reported to be around $315 fob for PG 64-16 and PG 70-10. The southern California market was reported to have slipped due to stiff competition. The new price range was in the low $300s for PG 64-16.
Canada
Several eastern Canada asphalt plants were closing down last week as cooler temperatures rolled into the region. Relatively warm temperatures in recent weeks allowed the paving season to be extended towards the end of November.
In Montreal, Quebec, asphalt prices softened from the C$280-285/t fob range two weeks ago for PG 58-28 to the new C$275-280/t range. One marketer said the market is starting to show signs of stability.
The new price range in Montreal had softened to a level that would keep the price at parity with import wholesale prices from the Midwest, including freight and terminalling costs.
One east Canadian refiner dropped its Montreal posted prices for PG 58-28 and PG 64-28 by C$6 to the new C$289 and C$329 posted price levels. The supplier also raised its PG 58-34 price by C$9, from C$340 to C$349/t. With these price changes, the supplier maintained a C$40 premium for PG 64-28 over PG 58-28, and widened the premium for PG 58-34 over PG 58-28 from C$45 to C$60.
West Canadian refiners have been offering wholesale asphalt volumes into the open market. Quotes were reported to be in the US$180-210 fob range for PG 58-28, similar to quotes heard from the US Rocky Mountain region.
In western Canada, last prices heard in Alberta were around the C$540 fob the closest supplier for Pen 150-200. Alberta bids for next year have been in the C$535-550 range for conventional asphalt.
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