Ergon and Cross announced plans to move naphthenic prices higher by 20 cents per gallon this week, closely following the Nynas increase earlier in the month.
On Tuesday, Sept. 15, Ergon bumped up its prices by 20 cents/gal across-the-board for its naphthenic cuts. The company also said that it has removed temporary competitive allowance (TCA) as well as temporary voluntary allowance (TVA) incentive programs at most accounts.
Cross said it will boost prices on Pale 500 and heavier grades by 20 cents/gal today, Sept. 16.
Ergon, Nynas, Calumet, Cross and San Joaquin all said that strong demand amid low availability had led to naphthenic prices firming over the last few months. In many cases, these producers had begun adjusting low-end accounts in August, upping most pale oil prices by a minimum of 10 cents/gal, while also removing TVAs that had been in play for core business.
In related and highly-anticipated news, Ergon expects its on-spec new bright stock production to become available in early November for market consumption, a company representative said. This comes as the Vicksburg, Miss., plant has reached completion of its recent expansion.
Ergon will take its Vicksburg facility offline for a short downtime of approximately four days in first-half October. This maintenance is not related to the expansion, the company said.
Paraffinic supply/demand fundamentals are less clear than those on the naphthenic side. Although players indicate there is robust interest for the heavy-end barrels, there is less excitement seen for light vis neutrals from the buy side.
Price ideas for spot activity are steadily firming for API Group I solvent neutral mid vis, heavy vis and bright stocks. Sources said that in some cases, sellers offers may even exceed published industry price indications.
Conversely, SN 100 to SN 250 values, although mostly stable, could fall victim to downward pressure if demand remains lax, some players suggested. The same trend was seen in the Group II and III arenas, they added.
Nonetheless, producers concur that demand is largely steady for most paraffinic grades for this time of year.
Despite some claims that demand is reasonably stable, overall volumes are much less for this month than were being sold one year ago, and production output has also been steeply reduced as well, one keen observer noted.
At the close of the Tuesday, Sept. 15, NYMEX session, light sweet crude futures ended at $70.93 per barrel, down a modest 17 cents compared to the week-earlier settlement at $71.10/bbl.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.