Failure of Expectations for Lower Recycled Base Oil Rates Despite Fuel Reduction

Fuel prices remained unchanged for the sixth day following the tax cuts in Indian states and the sharp reduction of petrol and diesel prices.

Global crude oil prices have once again hit a three-year high and reached more than $ 85. OPEC+ decision to gradually increase production in December might push up crude oil prices further. This will drive fuel prices upward again.

The lifting of corona restrictions and increased mobility in various countries, especially India, will increase fuel prices.

As the cold season begins, fuel consumption and recycled base oil demand increase. While the recycled oil market is waiting for increased demand, some of the buyers are waiting for the price to drop in the final months of the year, hoping that sellers will consider lower prices to get rid of their remaining feedstock.

Shipping costs have risen sharply in recent weeks. the latest GRI applied on November 8. This matter will increase the cost of exports especially for carrying flexitanks.

Adani Port had an announcement against accepting the container in Mundra, but the situation still remains uncertain.

The price of USD has risen by about 0.5 – 1 % in the past week, however, the status of Iran-US negotiations remains unclear.

In the paraffin and slack wax market, prices are still on an uptrend. The price of Paraffin wax 3-5%, FOB Bandar Abbas has reached $1350. Despite the high demand for this product, a shortage of production is still in the market. Production costs are still high along with the lack of raw materials and production.

In general, due to the above factors, there is no reason for a serious decline in the market and the reduction shocks that happen in the market are temporary and unreliable.