Weekly Lubricant and Base Oil Report: In Spite of Predictions, Recycled Base Oil Prices Continue to Rise

In the 12th week of the Russia-Ukraine war, crude oil prices continued to rise and reached $114 as Ukraine appeared to have won victories in some cities, along with Finland and Sweden announcing for the first time that they wanted to join the NATO military alliance.

This is in a situation where due to the stagflation in the market, there exist no high demand for crude oil. But prices are still high and have not fallen yet.

In the last week’s report, we stated that the recycled base oil FOB price of $820 seems to be at a high, which is at its highest, and we should probably wait for prices to stop growing.

While India’s furnace oil price fell by about $11.5, it has increased its Bitumen price by about $3 marginally. But the price situation in Iran has not changed and still the FOB price of Bandar Abbas in Iran has been announced as something around US $825 to $830.

The biggest reason is the lack of raw materials for the production of recycled base oil and the rising costs of recycling can be stated also.

Although India reduced its furnace Oil price by about $11.5, it still seems that the prices announced by Iran are still attractive to different customers in different countries and they are ready to buy at these prices.

The main reason for this is the high demand for these goods. The conditions of stagflation and the complexity of the issues have become so great that it is not possible to clearly advise customers whether buying now is the right purchase or not.

This is because the parity of the dollar against all currencies has changed over the last week, and on the other hand, because the terms of JCPOA have not been finalized yet and the parity of the dollar against the rial is at a high level.

On the other hand, due to the beginning of spring, which should normally reduce consumption, but prices have not been corrected. So in this complex situation, customers only have to buy based on their demand. And do not seek long-term investments for these works.

The price of lubricants, slack wax and paraffin is still at its highest level in Iran in the last four month, right now the Paraffin Wax 3-5% Oil Content is about 1400 USD FOB Bandar Abbas.

January 2022 has not decreased so far and FOB Bandar Abbas is reported to be around $1350 to $1400.

The cost of flexi shipping has not changed much and has not changed so far as shipping has stated several times that shipping costs may change. Perhaps the reason is the decrease in exports.

In the current situation, the factors affecting production and export prices are not in a very predictable way to state if the prices are falling or rising. In these circumstances, it is recommended to work on spot purchase.

This article was prepared by Mozhdeh Darbandizadeh, the Account Manager of Infinity Galaxy (www.infinitygalaxy.org).