Base Oil, Lubricants and caustic soda Trend in the Last Days of 2021

In the remaining days of 2021, crude oil prices have fluctuated between $70 and $76. It looks like 2021 will end with the same price range.

The base oil and recycled base oil transactions are slower than the same time last year and the first half of this year. Here are some of the reasons:

• Increased availability of base oil grades compared to the middle of the year, due to the return of several factories to production
• Uncertainty about the Corona pandemic with the resurging Omicron in many countries. The possibility of new restrictions and quieter activities leads to lower demand for fuel and lubricants.
• The usual tendency is to reduce inventories at the end of the year to avoid taxes. This has strengthened the incentive for suppliers to reduce current offers. This has pushed buyers to limit the volume of purchases and search for lower rates.

India has reported about 200 cases of Omicron. The situation does not seem to be out of government control at the moment. If people follow the protocols, the possibility of success in controlling Omicron will be high and the market will return to stability. Lubricant consumption in the Indian market has stabilized after several months of poor performance. There are signs of economic recovery in the country. The abundance of imports along with the steady supply from domestic manufacturers has allowed Indian buyers to take a relatively comfortable position without being pressured to accept the first offer.

Domestic base oil prices in China have been declining for weeks. It seems to be encouraging buyers to stop as long as possible.

Fluctuations in the price of the USD against the IRR have also caused more turmoil in the market. Producers and suppliers are currently in a state of ambiguity and uncertainty.

The logistics and shipping situation is still not significantly improved. Container shortages and staggering shipping costs are still shattering the fragile market. The news indicates that a new GRI might be applied again on January 2nd 2022, which means it will complicate the market even more than before.

Compared to the same period last year, it seems that there is a decline in production and exports in the base oil market.

Caustic soda has increased by about $20 over the past week. Its FOB price in Bandar Abbas has reached about $530, While Average FOB price in Qingdao Port China is 540 ~ 550 USD. According to the latest analysis of caustic soda price, its production and consumption are increasing on a monthly basis and the price is also increasing. Analysis shows that the consumption of liquid caustic soda is increasing, especially in China.

This article was prepared by Tina Taghavi, the account manager of infinity galaxy. (www.infinitygalaxy.org)