High Demand vs. Tight Supply of Recycled Oil

Iran’s Nowruz holiday has started on March 20; therefore, companies stopped their production about 10 days ago. Due to delivery schedule problems, the price has gone up and the issues seem to continue until the first week of April.

Base oil prices reacted to the volatility of energy and oil markets. Prices have been evoked by crude and commodity rise. Several mainstream producers have raised prices around the world. Oil prices shortly fell below $ 100 a barrel last week after hitting prices above $ 135. However, they soon returned to about $ 116 at the time of writing.

Suppliers and buyers in Asia have been trying to assess possible price trends and market needs. It forced some manufacturers to stop production until a clearer picture. Moreover, some refineries preferred to push more raw materials to the fuel production lines instead of base oils due to higher fuel prices.

Due to the fact that the main suppliers have already stopped their production for the market holidays, there is a high demand and a tight supply. Suppliers that are operating currently are just fulfilling their last year’s obligations.

The anticipated price range of recycled base oil in the market is above 720 for early April.

The price of caustic soda is also very volatile in the market. One of the reasons could be the cessation of production of one of the largest caustic soda producers for several months. Currently, the price of FOB caustic soda has reached over $ 700.

All shipping companies have added BAF to the overall cost; therefore, the cost of export products have increased. The Indian market tends to rise again in early April.

As a result of fluctuations in energy markets, oil participants found it difficult to base their operational plans for the next few weeks.

While chaos and conflict continue in Ukraine, many are unable to predict the market.

In general, it seems that the market will follow this confusion until the Ukraine-Russia and Iran-US come to an agreement.

This article is prepared by Tina Taghavi, the account manager of Infinity Galaxy. (www.InfinityGalaxy.org)