For the Quarter Ending September 2024
North America
In Q3 2024, White Oil pricing in North America, especially in the USA, experienced a notable downward trend. This decline was influenced by several interconnected factors, including a significant decrease in demand from the cosmetic industry, coupled with reduced consumer spending, which contributed to a bearish market sentiment. Supply chain challenges, exacerbated by weather disruptions and ongoing geopolitical tensions, further complicated the situation.
Overall, prices decreased by 1% compared to the same quarter last year, with a similar decline observed between the first and second halves of the quarter. This downward pressure on prices was primarily driven by heightened production costs, increased freight charges, and lower refinery run rates, all of which limited the availability of White Oil. Despite improvements in water levels in the Panama Canal, which were expected to enhance the arbitrage opportunities for White Oil, supply conditions remained challenging. A critical issue was the prolonged shutdown of ExxonMobil's Joliet refinery in Illinois, one of the major facilities serving the Chicago area. The refinery lost power due to severe storms and tornado activity in late July, affecting its ability to operate. This incident led to the shutdown of multiple units, including the crude distillation unit and catalytic reformer, significantly impacting White Oil production in the region.
As a result of these dynamics, the quarter-ending price for White Oil cosmetic grade CFR Texas was recorded at USD 1,607/MT. This figure reflects the prevailing negative pricing environment, characterized by subdued demand and ongoing supply constraints that contributed to the overall decrease in prices throughout the quarter. The market's challenges underscored the fragility of supply chains and the impact of external factors on production and pricing.
APAC
In Q3 2024, the APAC region experienced mixed performance in White Oil pricing, heavily influenced by global geopolitical tensions, weather disruptions, and fluctuating crude oil prices. China saw the most significant price changes due to supply issues, rising production costs, and subdued demand from the gasoil sector. Key challenges included refinery closures by state-run Sinochem Group, which affected about 2% of China's national output. The Zhenghe and Changyi refineries were closed due to high crude costs and weak fuel demand, impacting production significantly. Despite these closures, there was a slight recovery in production conditions, with the operating rate at small independent refineries rising to 53% in July. However, the scheduled maintenance of 420,000 b/d capacity from PetroChina and Sinopec added further complexity to supply. Overall, Q3 prices declined by 19% compared to last year and by 1% from the previous quarter. Nevertheless, a 2% price increase between the first and second halves of the quarter indicated some resilience, concluding with a quarter-ending price of USD 935/MT for White Oil Technical grade CFR Shenzhen in China.
Europe
In Q3 2024, the European White Oil market experienced a predominantly bearish trend, largely influenced by a significant 12% decline in feedstock crude oil prices. Challenging production conditions persisted as major refinery operations operated below capacity due to decreasing margins, prompting organizations to conduct strategic reviews of their European assets. The closure of several refineries, coupled with anticipated future shutdowns, created additional obstacles for White Oil production. Maintenance turnarounds at various refineries during the summer vacation period further exacerbated supply constraints, impacting the availability of White Oil in the European market. Demand from downstream lubricant and cosmetic industries continued to underperform even after the summer vacations. Lubricant blenders across Europe reported ample availability of White Oil, indicating little to no urgency for purchasing larger quantities for stock replenishment. Consequently, prices, which had remained relatively high during the summer months, began to face downward pressure due to this lack of demand. Overall, the combination of reduced crude oil prices, supply chain challenges, and weak demand dynamics contributed to a negative pricing environment for White Oil in Europe during the third quarter.
For the Quarter Ending June 2024
North America
The second quarter of 2024 in North America, particularly in the USA, has witnessed a steady pricing landscape for White Oil, marked by notable stability amidst varying factors. Despite fluctuations in crude oil prices and refinery operations, the market stability can be credited to balanced supply and demand dynamics, sufficient crude oil reserves, and consistent refinery utilization rates. Minor shifts in crude oil inventories due to geopolitical tensions and production adjustments had limited impact on White Oil prices, as demand absorbed available supplies effectively. In the USA,
White Oil prices experienced slight variations influenced by seasonal demand spikes, particularly during the peak summer season for cosmetic products. However, overall prices remained steady with no change observed between the first and second halves of the quarter. Year-over-year, prices decreased by 7%, indicating previous periods of higher volatility, while the quarter-on-quarter change showed a marginal decline of 1%, highlighting continued market stability.
Closing at USD 1622/MT for cosmetic grade CFR Texas, the quarter concluded with a reaffirmed sense of market equilibrium. Despite external pressures such as geopolitical uncertainties and refinery operations, the market's resilience ensured minimal and well-managed price adjustments. This consistent stability underscores a dependable and predictable market environment for White Oil pricing in North America, reflecting effective management of supply and demand dynamics amidst broader economic conditions.
APAC
In Q2 2024, White Oil prices in the APAC region have demonstrated a largely stable trend, influenced by several significant factors. Throughout this quarter, market dynamics were shaped by a balance between supply and demand, geopolitical tensions, and fluctuating raw material costs. The region's ample crude oil supplies, aided by strategic imports and favourable production rates, contributed to stable pricing. However, high freight charges and production cuts due to maintenance overhauls exerted upward pressure, counterbalanced by weak demand from key downstream industries such as lubrication and construction. Focusing on China, the most significant fluctuations in White Oil pricing were observed. The market showed a -26% decrease compared to the same quarter last year, underscoring the lingering impacts of reduced industrial activity and subdued economic growth. From the previous quarter in 2024, prices declined by -7%, reflecting the ongoing moderation in demand and the effect of lower crude oil prices. Despite these changes, the price comparison between the first and second half of the quarter remained constant, with no percentage change recorded. The correlation in price changes mirrored global crude oil trends and domestic economic activities, maintaining a steady equilibrium. The quarter-ending price for White Oil Technical Grade CFR Shenzhen stood at USD 920/MT, emphasizing the stable sentiment prevalent in the White Oil market. Overall, the pricing environment has been stable, neither overly positive nor negative, reflecting a well-balanced market landscape despite underlying volatility.
Europe
The European White Oil market mostly witnessed a mixed market sentiment initially with prices exhibiting a bullish market situation during the initial month of the second quarter, and then witnessing a bearish market for the remainder of the second quarter. Initially prices of the White Oil continued to climb attributed to rising production costs, despite demand conditions being moderate. However, towards the middle of this quarter, the market situation transformed as support from production cost waned. With prices of Crude Oil declining by more than 6% during the remainder of the second quarter, the European White Oil was prompted to witness a bearish market situation. Sluggish demand persisted throughout the second quarter for White Oil from the downstream paints and coating industries and from the lubricant industries as prices. Demand conditions from the lubricant industry continued to worsen, other than the fact that during the beginning the beginning of the quarter some suppliers were keen on restocking cargoes arriving from Asia, during early May 2024. However, high inflation rates continue dampened purchasing during the middle of the quarter. On the other hand, the persistent low demand from the paints and coating industry remained subdued through out this quarter. Declining permits, reduced procurement activities amongst German constructors and cancellation of projects continued to impart a negative pressure on the prices of the product. Overall, that market situation of White Oil across Europe, despite exhibiting a positive trend during the initial month, ultimately succumbed to the low demand conditions when this quarter came to a termination.
For the Quarter Ending March 2024
North America
The North American White Oil market overall witnessed a stable situation during the opening quarter of 2024. Prices of White Oil were recorded to inclined by approximately 1.5% during the middle of this quarter but later declined by the same magnitude, in the latter half.
With weather conditions being challenging and logistical and transportation costs experiencing a hike, this translated into the prices of White Oil. Moreover, demand for the product was also recorded to be strong as North America witnessed an early and heavy winter season which led to a strong demand from the downstream cosmetic industry. Moreover, the festive New Year season also forecasted positive transactions in the downstream skincare sector.
Prices of White Oil experiencing a hike were also attributed to the expensive imports arriving at the North American market due to disruptions being recorded in key waterways, namely the Suez and Panama Canal, which prompted freight charges to almost double. However, the latter half witnessed steady declines in the prices of products as supply conditions improved with post-festive dullness initiating its effect. Despite prices of feedstock Crude Oil inflating by 10%, the prices did not translate into the prices of White Oil.
Asia
The Asian White Oil market witnessed an overall bearish trend as prices of the product slumped by approximately 20%. The continued slump in the prices of the product was attributed to the low demand from the downstream lubrication industry as manufacturing activities continued to remain in contraction in China and improved only during March 2024. Automotive sales even though witnessed a surge in January 2024, later depreciated overall by 20% as the post-festive dullness continued to prevail across the Chinese market. Moreover, the demand from the construction sector was also recorded to be low as housing starts and house prices continued to decline throughout this quarter, leading to pushback of the construction materials. Despite prices of feedstock Crude Oil increasing by almost 20%, the Asian White Oil market was driven by subdued manufacturing activities, subdued automotive sales, and subdued construction sector. Towards the termination of the third quarter, the construction activity showed some momentum, but suppliers were recorded to be hesitant to procure further material leading to stockpiling of inventories.
Europe
The European White Oil market was recorded to be largely stable despite prices of Crude Oil increasing by approximately 10% during the termination of the first quarter of 2024. The low demand from the downstream paints and coating sector continued to drive the European White Oil market as the construction sector continued to remain mired in the downturn. This is largely indicated by declining permits and construction projects. Overall real estate firms remained downbeat throughout the rest year with outlook conditions being largely pessimistic. Overall investment sentiments remained historically negative with contractions witnessed in all segments of the construction sector, namely residential, commercial building, and civil engineering activities. However, during the middle of the first quarter, the European Polyurethane market received support from the demand side due to improvements in the demand from the importing British, Dutch, and Belgian markets where the construction sector improved. Moreover, challenging conditions in the existing supply chain system also contributed to the increments in the prices due to strikes by Union Workers, which led to limited functionality of railways and resulted in limitations in transportation and logistics.
For the Quarter Ending December 2023
North America
Prices of White Oil across the North American witnessed a mostly stable situation despite prices of upstream Crude Oil deprecating.
The prime reason attributed for the stability in the prices is largely to moderate demand from the cosmetic industry despite prices of upstream Crude Oil witnessing a depreciation of approximately 16% which was supposed to ease production costs. The moderate demand from the cosmetic industry largely kept the prices of the prices of the product was largely attributed to abnormal weather conditions maintained the purchasing activities of the consumers.
The Northern parts of the United States continued to experience a severe winter climate with higher levels of rain and snow fall, while the Southern parts of the United States continued to experience a warmer than usual climate during the first half Q4 followed by severe rainfalls. Increasing freight charges also played significant role in increasing the increasing the prices of imported cargoes entering the US despite the exporting Asian market witnessing a bearish situation.
APAC
In Q4 2023, White Oil pricing in the APAC region maintained stability amidst moderate demand from downstream industries. Despite a decline in upstream Crude Oil prices, the Chinese market exhibited minimal changes in White Oil prices, as a sufficient gap between existing demand and current supplies was established. The downstream automotive industry experienced stable demand, with a modest 1% increase in automotive sales noted in September and October. The fluctuating prices of upstream Crude Oil are anticipated to raise production costs, consequently impacting White Oil prices. The market outlook foresees a bearish trend in the coming weeks, driven by the shift of major automotive manufacturers towards the electric automotive sector and worsening economic conditions. China observed a slight depreciation of approximately 0.2% in the first week of December 2023, attributed to unchanged demand from the downstream lubricant industry. In the last quarter of 2023, White Oil prices in China recorded a significant 35% decrease compared to the same quarter in the previous year. The current quarter's price of White Oil Technical grade CFR Shenzhen in China stands at USD 1153/MT.
Europe
White Oil prices in the European market displayed a varied trend throughout the fourth quarter of 2024. The technical grade experienced fluctuations, with automotive industry sales witnessing an increase in October and November but a depreciation in December 2023. Conversely, the cosmetic grade consistently exhibited a bullish trend, impacting demand from the lubricant sector. The bullish market situation for cosmetic-grade White Oil in Europe was primarily attributed to the advancing winter season, driving demand in the downstream skincare industry. However, the peak festive month of December presented a reversal in trends for both grades. While demand for technical grade remained subdued, there was an expansion in demand from the cosmetic industry. The heightened demand for the cosmetic grade was driven by improved purchasing sentiments among the local populace, exerting pressure on downstream skincare and cosmetic industries. Additionally, the significant impact of depreciating Crude Oil prices, which plummeted by 16%, contributed to the overall market dynamics. Increasing freight charges, particularly in response to the worsening situation at the Red Sea, also played a role in shaping the mixed trend observed for the product.
