East coast
East coast wholesale prices slipped last week as one or more local refiners attempted to move volumes out of inventory for year-end accounting purposes. Wholesale buyers that had tankage capacity were seeking volumes as they feared that asphalt prices may rise in the first part of next year, especially if crude prices continue the recent upward trend.
An east coast refiner reported selling a barge of PG 64-22 for December movement into the midatlantic market at $230 fob. The supplier stated that this sale was necessary to reduce inventories before the end of the year. The supplier stated that the market for wholesale asphalt was at $230-235 fob in the east coast.
A western Gulf coast supplier sold a parcel of PG 64-22 for delivery to an Eest coast location. The volume was sold at $240 delivered to the east coast location, or a fob equivalent price back to the Gulf coast of around $200. This was the second parcel sold from the Gulf coast refiner in the past few weeks for delivery to the East coast.
There were no new wholesale PG 64-28 transactions reported. But New England buyers stated that last quotes were in the $245-260 delivered range from east coast refiners and from export sources.
A wholesale flux buyer reported purchasing a parcel of flux at $240 delivered. The buyer stated that it has been purchasing 2-3 parcels of flux a month.
With cooler temperatures in the east coast and the rise in crude prices, the recent decline in east coast retail prices seemed to come to a halt. The only markets that showed declines were eastern New York and the Florida market.
In eastern New York, prices slipped from $310 to $290-300, effective 7 December. Also effective 7 December, one Jacksonville, Florida, supplier dropped its price from a solid $315 to the $310 fob level. In Tampa, one supplier dropped its price from $310 fob to $300 fob for PG 64-22.
Other retail markets were stable as the season was coming to a close, especially in the northern states. In New England, year-end prices were at $370-375 fob, exclusive of the gross receipts tax. One local supplier commented that high-priced inventory in the tanks — from purchases made a few months ago — had prevented local participants from dropping their prices in line with some surrounding states.
A central New York supplier shut down its plants last week, with its closing price at $310 fob. In southern New Jersey prices were at $280 fob, while Baltimore, Maryland, prices were at $285 fob for PG 64-22. Virginia prices were at $285 fob, while the coastal Carolinas were at $310 fob. The inland Carolinas were also at $310 fob. Atlanta, Georgia, was holding at $315 fob, while Savannah was at $300.
Gulf coast
There was an increase in Gulf coast wholesale buying and selling interest last week. Suppliers were attempting to empty out their inventories before the end of the year. Uncertainty about wholesale pricing next year raised wholesale buyer interest and caused a flurry of purchasing. Higher crude oil prices may have also contributed to the buyer interest, as buyers attempted to close deals for fear that asphalt wholesale prices might rise early next year with rising refinery crude feedstock costs.
An eastern Gulf coast refiner sold 110,000 bl of PG 67-22 for movement mostly in December. The volumes were sold at $215-227 delivered to Gulf coast destinations. he fob equivalent price was reported to be $200.
A western Gulf coast supplier sold a parcel of PG 64-22 for delivery to an east coast location. The volume was sold at $240 delivered, or a fob equivalent price of around $200. This was the second parcel sold from this refiner in the past few weeks for delivery to the east coast.
A Gulf coast refiner reported selling 170,000 bl of conventional asphalt for export at a fob price of $180. The supplier stated that this one-time year-end transaction was done to reduce its asphalt inventory.
The retail market was reported to be quiet in the Gulf coast. In Alabama, one supplier stated that its prices were holding at $350 fob for PG 67-22 in the northern and central regions of the state. In southern Alabama, prices were heard at the $350-360 fob level for PG 67-22. But local marketers commented that southern Alabama may face pressure from the recent declines in Florida prices.
Southern Mississippi prices were heard at $335-350 fob. Southern Louisiana prices were holding at $335 fob for PG 67-22.
Southern Texas prices, from Houston to Corpus Christi, were at $275 fob for PG 64-22. Inland Texas locations were slightly higher, at $275-290 fob for PG 64-22. There was a wide range of quotes for next year’s work, but one marketer stated that effective prices were around the $325-350 fob range for PG 64-22.
Midwest
Midwest wholesale barge prices for December lifting softened from the $180-205 range to the $177-200 fob range last week. The recent strength in crude prices resulted in more asphalt wholesale buying interest in the region.
A midwest refiner sold two three-barge tows totalling 96,000 bl of PG 67-22 for December delivery. The price was $177 fob the refinery for these volumes which will stay in the midwest. One buyer reported receiving quotes for barge volumes at $175 fob.
One midwest supplier stated that it was moving some rail volumes in December at the $175 fob price. The supplier stated that this price was lower than its November price for rail barrels.
A midwest flux supplier reported selling a small quantity of flux for December lifting at $235 fob. The new price represented a $15 drop from the supplier’s November flux wholesale prices.
Cooler temperatures in the midwest resulted in the slowdown of asphalt liftings. Retail prices were relatively stable in the region. But marketers commented that if the crude price strength continues, the higher costs would be reflected in quotes for next year’s paving jobs.
Last prices in the Chicago, Illinois, retail market were at $325-340 for PG 64-22. Current quotes for 2007 were heard at $365 fob. But one marketer commented that if crude prices continued to firm, quotes could increase further for the April through July timeframe.
Grand Island, Nebraska, prices were at $380 fob for PG 64-22, while quotes from Wyoming into western Nebraska were at $390 fob for PG 64-22.
In Detroit, Michigan, last prices for PG 64-22 were heard at $360 fob. In northern Ohio, last retail prices were at $340-350 fob for PG 64-22, while in southern Ohio prices were at $295 fob for the same grade.
In northern Kentucky, prices were at $325 after softening a few weeks ago to the new $300-310 fob range. Louisville, Kentucky, prices were unchanged for the past month, with prices at $335 fob.
In Memphis, Tennessee prices were at $340, while Nashville prices were unchanged at $340-345 fob. Chattanooga, Tennessee, prices were holding at $310 fob level for PG 64-22, with neighboring Atlanta, Georgia, prices stable at $315 fob for PG 64-22.
Rocky Mountain and west coast
Rocky Mountain wholesale asphalt prices were in the $180-210 fob range last week. Rocky Mountain refiners were focussed on supplying their historical customers with wholesale volumes. Winter-fill asphalt was available from the Canadian Rockies at prices that were competitive with the US Rockies.
One west coast buyer stated that it was purchasing wholesale rail volumes for December from the Rocky Mountain region at $185 fob for PG 64-22. One supplier was reported to be in the $180-185 fob range for PG 64-22.
Another Rocky Mountain refiner sold a total of 10,000t of PG 58-28 at the December winter-fill price of $200. The refiner also sold 2,000t of PG 58-28 for December delivery at $210 fob.
There is sufficient asphalt winter-fill available in the Rocky Mountain region for this winter. But local suppliers warn that the winter-fill picture is changing in the Rockies, and this traditionally well-supplied winter-fill market could end up becoming short on winter-fill asphalt in the next few year. Next year, at least three cokers are scheduled to come on stream, which could decrease the availability of vacuum tower bottoms in this market and could lead to a reduction in the availability of winter-fill availability.
Wholesale asphalt suppliers continued to be reluctant to quote wholesale prices for next year. One refiner stated that quotes would be highly dependent on its asphalt inventory situation and on crude oil prices.
Asphalt liftings slowed down in the Rocky Mountain region due to cold weather conditions. In some west coast states, demand was strong for this time of the year.
At the last Wyoming letting, one local supplier bid the work in the low $300s on a fob basis. Other quotes at the letting were around the $370-380 fob level. One Wyoming supplier stated that it was quoting next year’s work at the $350-370 fob range for base plants and stationary plants. Another supplier reported its price at $380 fob for PG 58-28.
Utah prices were heard at $390 for AC-10, while Las Vegas, Nevada, prices were also at $390 fob for AC-30. Last prices heard from Boise, Idaho, were at $425 fob for PG 64-22.
In Oregon, December prices for PG 64-22 were at $330-335 fob, down by $5-10 compared with November. Liftings were strong in December, but overall liftings for the year were about the same as 2005.
One Oregon supplier announced that its posted price for PG 64-22 would remain at $350 fob for 1 January, unchanged from the December level.
The northern California market was reported to be at around $315 fob for PG 64-16 and PG 70-10. On the other hand, the southern California market had a range of prices. One supplier reported that prices were at $310-320 fob for PG 64-10. Another supplier blamed stiff competition for the lower prices of around $305 fob for PG 64-10. PG 70-10 prices were reported to be around the $320-330 fob level. One southern California supplier stated that it was currently the only supplier with PG 70-10 and was running tight on volumes.
Canada
The asphalt market across much of the Canadian market was winding down, with hot-mix plants closing down operations for the winter.
After declining for the past several weeks, Montreal, Quebec, prices ended the season at the C$270-280 fob level for PG 58-28. The rapid decline in Montreal prices of over C$100 in two months was blamed on the excess inventory build-up and poor asphalt sales. Montreal-area marketers pointed out that if crude remains over $60/bl a restoration in asphalt prices would be required in Montreal.
Last posted price announcements for Montreal were on 22 November. No more posted prices are expected from local suppliers until spring of next year.
In Toronto, Ontario, prices were reported to be relatively stable with prices in the C$375-390 fob range for PG 58-28. One supplier reported the average price to be at C$385 fob. A good balance between supply/demand fundamentals was the main reason behind the price stability, especially in comparison to the Montreal market. The shutdown of one local refinery contributed to the reduction in supply in this market.
In western Canada, cooler weather conditions have shut down most hot-mix operations. Last bid prices that were heard in Alberta for next year were in the $540-550 fob range for Pen 150-200.
Send comments to feedback@argusonline.com
ntcw
