Fashion designers, artists, interior decorators and anyone who cares about color have been eagerly awaiting the announcement of the Pantone Color of the Year 2020.
In early December, the Pantone Color Institute announced that it had picked Pantone 19-4052 Classic Blue, a color that instills calm, confidence and connection, and highlights our desire for a dependable and stable foundation on which to build as we cross the threshold into a new era. A reflective blue tone, Classic Blue fosters resilience, the Institute stated.
If one were to imagine a color to portray the base oils business, the hue selected for 2020 would offer a fairly good depiction of the state of affairs as 2019 wraps up and the industry enters a new decade. Following a couple of years of turmoil and frequent price adjustments, the last few months of the year yielded few surprises and a quiet, stable posted price scenario.
The consensus among market participants in mid-December was that base oil supply remained abundant in the United States, but inventories were more manageable than expected for the last month of the year-a time when demand tends to decline and inventories grow.
The strategies implemented backstage by a number of producers to manage inventories, such as discounts into selected accounts and temporary competitive allowances, appeared to have worked, as availability in a few segments tightened and discounts became less prevalent.
Aside from the usual campaigns to promote sales, a few turnarounds-including one at HollyFrontiers API Group I plant in Tulsa, Oklahoma, and at Calumets Groups I and II unit in Shreveport, Louisiana-
coupled with increased fuel production to the detriment of base oil output, also helped lower inventory levels.
The naphthenics segment was described as fairly balanced, with demand and pricing deemed generally steady in the fourth quarter, too.
Activity in the last few days of the year slows down as participants take time to enjoy the holidays, and this year will probably be no exception. The stable posted price scenario may offer a sound foundation for the upcoming year, when producers and buyers will likely face the challenges of an industry that never stands still.