Lube-Tech’s Market Watch
While crude values have remained relatively low in 2015, even hitting lows not seen since 2009, Group I and Group II prices have increased on specific grades such as Bright Stock and other heavy viscosity grades due to tightness in the market. Meanwhile, low viscosity grades have seen back-to-back decreases in August and September due to crude pricing dropping and summer demand tapering off. Group III values had remained steady since December 2014, weathering crude’s volatility and finally were reduced minimally in September. PAO continues to remain tight and will remain tight for the next 2-3 years while more feedstock and finished PAO capacity comes online.
Other market notes as we wind down Q3:
· Additive pricing has remained stable throughout the 2015 crude fluctuations.
· Finished lube pricing has remained flat since the minimal decreases implemented in Q1 of 2015.
· The first US Group I refinery shutdown was announced. Planned for 2016, Exxon will be shuttering the GI production at their Beaumont, TX facility. This further constricts the heavy 600 availability and will likely impact pricing on both GI and GII 600 in 2016.