NOTE: ICIS is considering introducing a feedstock price reference for 10-15% oil content SN150 slack wax on an ex-tank Rotterdam basis. Please send all comments to carl.roache@icis.com .
| Market focuses on December domestic prices |
Attention has turned to December pricing on the European domestic paraffin wax market, with preliminary indications suggesting prices will likely remain stable.
Demand is unexceptional and is expected to decline as the year-end approaches. However, base oil production cuts are now commonplace across Europe, and this is reducing slack wax and paraffin wax supply, which should keep the market in balance, sources said.
A southwest European producer explained that its production of low-melt point paraffin waxes had been reduced following a cut to its base oils output. However, its mid-melt point wax production remained unchanged, and the overall European paraffin wax market was described as balanced.
Slack wax prices eased in November and certain sources believe they could decline again in December. As in the paraffin wax market, the length and severity of base oil production cuts will play a role in slack wax price development next month.
A southwest European producer talked of a largely stable market. European demand was low but being offset by export sales to regions including Africa. Its candle grade 56-58C prices are within the range published above, while its 52-54C are in excess of those published, the producer said.
Looking ahead to December, the producer expected its prices would remain stable.
An eastern European producer also said its 52-54C and 56-58C melt point paraffin wax prices would likely hold steady in December, supported by reduced supply following base oil production cuts.
A northwest European buyer had similar expectations, predicting its prices would remain unchanged next month. At present, its candle grade prices range €1,200-1,250/tonne FD NWE. Overall downstream candle demand was at a normal level for the time of year, but there were notable offtake variances on its different product ranges, it said.
Semi-refined wax prices are holding steady this week on the Poland/Belarus border, but could edge down in December as the market balance shifts as demand wanes, sources said.
A northwest European slack wax trader confirmed prices had recently eased but remained in the high-€800s/tonne ex-tank Rotterdam, for material with a maximum oil content of 15%. Steady demand and reduced supply because of base oil production cuts were supporting prices at present.
However, looking ahead to December the trader expected a further price reduction because of recent softening upstream and a predicted seasonal downturn in demand.
Late on Wednesday, front-month Brent crude oil was trading at $110.84/bbl compared with $109.30/bbl last week.
($1 = €0.78)
This week on ICIS www.icis.com:
20/11/2012 20:58 US crude futures slide $2.53/bbl on ceasefire hopes
20/11/2012 06:49 Mideast base oils may extend falls on weak demand, supply glut
16/11/2012 17:14 US naphthenic base oil price decreases announced
Follow Carl Roache on Twitter @CarlRoacheICIS for regular tweets on the market
