The calm market waiting to ignite again in 2022

The base oil market has been slow over the past few days, as many operations have either been shut down or were operating slowly during the Christmas and New Year periods. There weren’t any signs of price movements in the market, and most levels remained the same from the last report. However, there are some signs of market growth in January.

Omicron remains a real concern across Europe, the Middle East and Africa. Reports suggest that the new strain leads to a less serious symptom with lower deaths. The period of instability and turmoil seems to continue in the first half of 2022.

COVID-19 contamination rates have affected base oil consumption, and lubricant demand has declined due to less travel. Many manufactures have limited production.

The recent rise in crude oil prices could boost base oil. Over the past week, as predicted in previous reports, the price of oil has fluctuated in the range of $72 to $76. There is currently no evidence for rising above this range. Brent recent rises seems unusual when many exchanges have been closed for the holiday season.

It seems that with the addition of several new vessels on the Bandar Abbas to India’s line, shipping conditions improve. However, the situation is not expected to improve utterly until mid-2022.

The Indian market is on the verge of slump due to the end-of-year situation and the threat of the new Omicron virus. The prospect of base oil shipping to India has allowed Indian buyers to hold back on their purchases and wait for lower prices. Currently, CFR prices of recycled base oil to western Indian port, such as Mundra, Nhava Sheva and Kandla, are back to $700 and below. Hopes are high for the market to return to a better trend around January 4th, after the holidays.

In China, import speeds have been rising for a while, but it appears to have slowed again. This was partly due to the expectation of price reductions in January by buyers. Uncertainties about China’s economy have dampened the desire to deal in large quantities. It is unclear whether demand for lubricant and caustic soda will be as strong as expected after the New Year holidays. China officially has a seven-day holiday from January 31 to February 6, and the festivities culminate with the Lantern Festival on February 15. Chinese market activity is likely to return in the second half of February.

Transportation and supply issues continue in the Middle East, and these conditions will remain at least until the economic situation improves, and the corona situation becomes stable.

The situation of Lube-cut is still in a state of disarray, and it seems that nothing positive will happen until mid-2022. Although the paraffin and the slack wax market still have high demand, but they are facing supply problems due to the unsettled situation of raw materials.

Over the past two weeks, the consumption of lye caustic soda has increased. Caustic soda flakes also have grown due to the middle of the season higher consumption. The FOB price of Bandar Abbas for caustic Soda Flakes has reached about $540 to $550. The FOB price of lye caustic soda also has reached around $315.

Generally, the recycled base oil market is in a slump and base oil prices were different this week. Some grades declined, some remained unchanged, and some increased slightly with increasing repurchase interest. The lube-cut market is in high demand and continues to face supply difficulties. There is also demand for export in the caustic soda market, and new investments appear to be moving from traditional supply sources to emerging markets.

Infinity Galaxy wishes you a year fully loaded with happiness, success, and prosperity. Have a happy and healthy year in 2022.

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