Market news on Oct 16 2014
As the crude oil prices are going through severe losses in the market spot paraffin wax prices were stable to soft .
Major Chinese traders are waiting for the refineries to fall the prices even better , they are not intend to purchase any cargoes right now. On the other hand, they are not too optimistic on the outlook of the market as demand is poor and is likely to remain flat towards the year end.
Buyers in southeast Asia feed back that they have sufficient inventories to wait as long as their stock can last. They’re expecting to take advantage of the lower prices in the coming weeks. As the year-end is approaching they need to consider their financial statement, thus they hope to keep they inventories lean.
The IMF has estimated global growth for 2014 to be at 3.3% and projects growth of 3.8% in 2015. The downward forecast was due to setbacks in advanced economies during the first two quarters of 2014 and a weaker expected outlook in several emerging economies, according to an IMF release.
The paraffin wax prices of European are stable and the majority of sources do not expect to see any significant changes before the end of the year. This year’s demand for candle wax was much lower than the expectation and forecast but the total demand for year is steady.
Low VGO prices have resulted in most European base oil refineries being run at high rates in recent weeks, which means wax output is likely to increase and ease the tightness.
Traders expect semi-refined wax prices to decrease significantly in November because of lower demand.The high season in Poland ends sooner than in western Europe, with most sources expecting it to finish at the close of this month.
With the dollar strengthening so much against both the Polish zloty and the euro, prices in these later currencies have been supported, while dollar prices decrease.
While crude oil futures remained on their downward trend, pressured by the global oversupply of crude oil.
Paraffin wax spot prices are stable at mid-October.
Sources show that wax supply shorten quickly between September and October but it didn’t result in any supply or price movement so far in the month. The sharp drop in feedstock costs may be one of the reason for this situation.
That factor, along with steep price reductions in Group I base oils seems to have thus far kept the paraffin wax market grappling with uncertainties posed by the upstream conditions.
In October Group I base oil producers reduced its prices, depending upon the grade and the producer, and effective dates also varying respectively.
Slower demand and falling feedstock prices underpinned the base oil moves, putting those factors also within the wax market.
US sources expect European Group I production rates to decrease because of ongoing slow demand.
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