Weekly Lubricant and Base Oil Report: Predict to stop rising Recycled Base Oil prices after a period of the sharp rise

Over the last week, crude oil prices have fluctuated between $105 and $113. Despite last week’s meeting of OPEC and their decision to increase the capacity to 480,000 barrels from 1st June, this decision did not have a serious impact on the market and the market did not show a serious decline.
However, the more open conditions of lubricant and oil reached their highest level during the last few years during the previous week with a significant increase in the price of recycled base oil to around FOB Bandar Abbas at $820. And it seems that the price is the highest price available in the current situation and it is likely that market conditions will slightly change the next week.
After last week’s Eid al-Fitr holiday in Iran, the UAE, and Islamic countries, recycled oil exports have returned to normal and exporters are trying to deliver on their previous commitments, so we should expect stability after a sudden rise in prices. Given that the cost of freight has reached its highest level in the last 6 months, it seems that the cost of this product is now at its highest final price. Due to the high price and consumption of fuels in different countries, these conditions were the stimulus for the increase in recycling prices. Various markets, including East Asia, Turkey, and West Africa, are in high demand for recycling. In the current situation, it seems that all goods based on lubricants, such as base oil, slack wax, and paraffin wax, have been under pressure in terms of price because the prices of all these goods have reached their highest level. In the current situation, the price of paraffin wax with 3-5% Oil Content, FOB Bandar Abbas is about $ 1400, and the price of FOB Recycle Iran is announced by some suppliers as about $820. Also, the FOB price of some detergent raw materials, such as caustic soda, is more than $800 and is higher than the price of Chinese competitors.
Given that we usually wait for the recycling prices to adjust in the spring and summer, and given that these increases have been very large in the last two months, it seems that the growth of prices will stop and the market will stabilize.

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