India Shocked the Market by Ceasing the Shipping from Several Origins

The price of recycled base oil and lubricant peaked in the first half of the year due to declining production and high demand. Last week, while production continued to rise, demand levels were moderated. Downward pressure on prices remains but they are looser after the sharp rise in oil prices due to the OPEC+ decision that did not allow members to increase production. The rise in oil prices has brought many buyers back to the market. These buyers are finalizing their purchase in the current situation in order to avoid buying at higher prices as they expect prices to increase along with crude.

Shipping problems and a steady increase in shipping costs continue to plague the trading market. On Monday, Adani Ports and Special Economic Zone Company, India’s largest port operator, announced that its terminals would no longer export or import container cargo from Iran, Pakistan and Afghanistan from November 15. This will further complicate shipping and export conditions.

Demand for lubricants has increased in India as many restrictions on the Coronavirus have been lifted and mobility increased. Buyers of base oil were also eager to save reserves before a possible rise in base oil prices as crude oil and commodity prices plummeted.

Although Covid-19 has been controlled in India, experts have warned that it may rise again after festivals in the remaining months of the year. Diwali is celebrated on November 4-8 and is one of the most famous celebrations. It is expected to create a lot of mobility and encourage people to travel, which will affect the number of covid infections and the market. This holiday is also celebrated in other Southeast Asian countries.

In China, while there is still interest in the purchase, lack of vessel space and port congestion is hampering completion due to epidemic restrictions.

Production restrictions and high prices of paraffin and slack wax still exist. The price of slack wax FOB has increased by 70% in October compared to the previous year.