Weekly Lubricant & Chemical Report: Market Recovery with the Beginning of Fall

The price of crude oil opened negative on Monday then it grew slightly and finally decreased on Monday and Tuesday.

It seems that the trend of oil price reduction will continue and considering that the central banks of 5 countries have decided to hold a meeting to stand against the inflation in their countries and to raise the interest rate, these create conditions that the price of oil may decrease again.

Another reason for the decrease in the oil price is that the production rate of the world has decreased.

With all these words, within the last week, recycled base oil in Iran was exported in a good volume. It seems this is happening because of the beginning of the fall season. Still, the level of production, even for a product like recycled base oil, is not at an acceptable level compared to last year, and the prices are still not acceptable for some markets, considering that these prices are almost equal to virgin oil in some countries. 

The JCPOA debate still has ambiguous conditions and it is not clear what will happen to the dollar situation. As the autumn season approaches and the use of detergents increases, as well as the level of caustic soda usage from different countries, the price of caustic soda has risen seriously in the last week.

The price of caustic soda in FOB Bandar Abbas reached about 670-700 dollars and it is slowly decreasing. After about 5 to 6 months, while the price of paraffin wax was around 1200 to 1300 dollars, now it has reached about 1050 to 1100 dollars and the FOB price of recycled base oil increased from 820 to over 850 dollars.

Currently, the market situation shows a downward trend in production and the forecast for the coming weeks, but this decrease in prices and decrease in demand level is not clear at the moment, which makes producers in different countries compete with each other to increase production or not.

China Caustic Soda Market Condition

While the main enterprises in Jiangsu were in overhaul and production decreased, China’s caustic soda market was stable last week. The foreign trade orders have increased and the overall market transaction atmosphere is acceptable.

It is expected that some enterprises increase the caustic soda prices today.

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