Argus Global Waxes

Incorporating WAX DATA

Issue 21-11 | Tuesday 7 December 2021

Market summary Prices

07 Dec 02 Nov ±

„„ Paraffin wax prices in Asia continued on an upward trajec- Paraffin wax, fob north China $/t
tory in November, as tight supply continued to lend support to Fully-refined, bulk liquid 1,530.00 1,380.00 +150.00

prices. Fully-refined, slab 1,570.00 1,420.00 +150.00

Semi-refined, slab 1,530.00 1,380.00 +150.00
Paraffin wax, fob south China $/t
„„ Wax prices moved up firmly across Europe again in Novem-
Fully-refined, slab 1,570.00 1,420.00 +150.00
ber, supported by tight supply and rising feedstock costs.
Semi-refined, slab 1,530.00 1,380.00 +150.00
Paraffin wax, fob Thailand $/t
„„ US fully refined petroleum wax and slack wax spot prices Feedstock slack 950.00 1,117.50 -167.50
continued to increase on tighter supply and firm demand. Paraffin wax, delivered northwest Europe $/t
Fully-refined, low-melt 1,750.73 1,618.33 +132.40
Fully-refined, mid-melt 1,773.25 1,641.53 +131.72
Fully-refined, high-melt 1,807.03 1,676.34 +130.69
Slack, 10-20% 1,260.98 1,148.49 +112.49
Paraffin wax, fob US Gulf bulk liquid $/t
Fully-refined, low-melt 1,840.86 1,774.72 +66.14
Fully-refined, mid-melt 1,884.95 1,818.82 +66.14
Fully-refined, high-melt 1,884.95 1,818.82 +66.14
Contents
Slack, low-melt 1,576.31 1,466.08 +110.23
Oil status 2 Slack, mid-melt 1,576.31 1,466.08 +110.23
Business outlook 3 Slack, high-melt 1,620.40 1,510.17 +110.24
Market commentary 4 Crude oil $/bl
News and analysis 11 Ice Brent 81.47 83.54 -2.07
Imports and exports 13 Nymex WTI 79.03 80.93 -1.91
Feedstocks $/t
Slack wax v VGO, SN150 v VGO and FR wax v VGO $/t VGO 2% NWE barge 570.43 584.74 -14.31
VGO 2% USGC barge 578.68 590.64 -11.96

Slack wax vs VGO SN 150 vs VGO Base oils $/t

FR mid melt vs VGO SN 150, Singapore ex-tank 887.50 852.00 +35.50
1200 SN 150, Europe domestic 972.50 1,001.50 -29.00
SN 150, US domestic 1,075.00 1,120.40 -45.40
1000 Europe SN 150 premium to VGO 402 417 -15
US SN 150 premium to VGO 496.32 529.76 -33.44
800
hhh Singapore SN 150 premium to gasoil 207.60 142.63 64.97
Europe SN 150 premium to ULSD, NWE 282 280 +1.42
600
US SN 150 premium to ULSD, USGC 373.63 380.49 -6.87
Oil products $/t
400
Gasoil 0.005%, Singapore 679.90 709.37 -29.47

200 ULSD, NWE, German barges 690.66 721.08 -30.42

Dec 20 Mar 21 Jun 21 Sep 21 Dec 21 ULSD, USGC Colonial 62 701.37 739.91 -38.53

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 Argus Global Waxes
Oil status
Crude oil
Crude prices were mixed as news of a co-ordinated release of
strategic stocks failed to arrest a recent rise in global prices,
although subsequent reports of a new Covid-19 variant did just
that a the end of November.
Atlantic basin benchmark North Sea Dated climbed by 59¢/
bl to $82.29/bl in the week to 25 November, after approach-
ing $83/bl earlier in that week. But US marker WTI dropped by
62¢/bl to $78.39/bl in a shortened week ahead of the Thanks-
giving holiday. Subsequent news of fresh travel restrictions fol-
lowing the emergence of another Covid-19 variant in southern
Africa sent prices sharply lower on both sides of the Atlantic in
early trade on 26 November.
The announcement of a co-ordinated global release of stra-
tegic stocks failed to dampen prices. US president Joe Biden
ordered the US to draw down up to 50mn bl of crude from its
Strategic Petroleum Reserve (SPR), as part of a global push
by oil-consuming countries to lower fuel prices. India, the UK,
South Korea, Japan and China are expected to participate.
Base oils
Global base oil prices were mixed. Light-grade prices in Europe
and Asia-Pacific got support from tighter surplus availability.
Surplus light-grade supplies in the US were being lined up for
export.
In Europe regional Group I prices have slipped as demand
slows. Blenders have curbed their purchases as they prepare
for the upcoming holiday season. Prices for SN 150 were
steadier as reduced production cut spot supply.
Already-muted demand is slowing further as blenders pre-
pare to lower their run rates ahead of and during the year-end
holiday season. Blenders are securing smaller volumes or plan
to work off their inventories for the next few weeks before
they slow or temporarily shut down production.
Some blenders are also cutting production because they
expect to have fewer workers at their manufacturing facilities
over the coming weeks. More workers are on sick leave after
contracting Covid-19, reflecting growing infections of the virus
in the region.
Asia-Pacific base oil prices have stayed mixed, with supply
more than sufficient to meet demand.
Supply has remained sufficient in the fourth quarter of the
year even with a recent slowdown in exports from markets like
Singapore, Japan and Thailand compared with September.
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Issue Ref: 382233
Issue 21-11 | Tuesday 7 December 2021
Supply received a boost from a gradual recovery in ship-
ments from Taiwan and a steady flow of exports from South
Korea. There were also signs of regional availability getting a
boost from more distant markets like Mideast Gulf and even
the US. Difficulty with securing vessels has also continued to
curb market activity and slow the removal of surplus supplies
from the region.
US base oil prices have extended their declines on weaker
domestic demand and surplus supply. Several refiners and
blenders continue to clear their inventories before the end
of the year. Some buyers and sellers with storage tanks are de-
pleting their inventories to limit their year-end tax liabilities.
VGO
High and low-sulphur VGO differentials to Ice February Brent
futures edged higher on 26 November, but outright prices col-
lapsed in line with underlying crude futures values.
Outright VGO prices fell sharply, as the underlying Ice
February Brent contract lost $8.51/bl to close at $72.42/bl on
26 November. Crude futures prices fell as markets reacted to
growing concerns around the Omicron variant of the Covid-19
virus and a fresh spate of international travel restrictions
because of its emergence.
The VGO market was thinly attended in the US (29 No-
vember) amid a weak energy complex and depressed prompt
feedstock demand.
Refiners were mostly recalibrating their positions while ac-
counting for the crude complex volatility, making for a poorly
defined VGO market.
Base oils Group 1 SN 150 $/t
ex-tank Singapore fob domestic NWE
US domestic
1,300
1,200
1,100
1,000
900
800
700
13 Aug 21 17 Sep 21 22 Oct 21 26 Nov 21
Argus Global Waxes
Business outlook
Manufacturers shipments, inventories and orders survey
Shipments New orders
Sep/Oct Aug/Sep Jul/Aug Sep/Oct Aug/Sep
Durable goods 1.6 0.6 -0.5 -0.4 -0.4
Nondurable goods 2.4 1.3 0.7 2.4 1.3
Americas
A $1 trillion infrastructure bill heading to the White House for
final approval will raise taxes on dozens of petrochemicals
such as ethylene, propylene, butadiene, benzene, toluene,
xylene and other chemicals. The House of Representatives
passed bill 228-206 on 5 November, reinstating and raising
Superfund taxes that previously expired in the 1990s. The
Hazardous Substance Superfund Trust Fund, established in
1980, aimed to help with the clean-up of abandoned hazard-
ous waste sites across the US. The fund operated from 1987
to 1995. The previous Superfund tax for ethylene, propylene,
butadiene, benzene, toluene and xylene was $4.87/t, but is
expected to increase to $9.74.
US goods and services deficit grew $8.1bn in September
to $80.9bn, up 11.2pc from the previous month. Year-to-date,
the deficit has increased 33.1pc from the same period last
year. September exports fell 3.0pc month-over-month, while
imports jumped up 0.6pc. Demand for imported goods has
surged ahead of the US holiday season, while clogged ports
slowed efforts to move goods out of the country. But exports
of US services grew $600mn to $64.9bn in September on the
back of loosening travel restrictions and the reemergence of
in-person business.
The US reopened its land border crossing to non-essential
travel from Mexico on 8 November, ending a 19-month freeze
put in place to combat the Covid-19 pandemic. During that
time, vehicle and rail travel between US and Mexico had been
restricted to mostly essential travel, such as trade of goods
and services.
Europe
Germany's manufacturing output fell in September from
August and the outlook for the industrial economy remains
"gloomy," the country's economy ministry said.
Seasonally and working-day adjusted manufacturing output
slipped by 1.5pc in September from a month earlier. This was
driven by a 2.8pc decrease in capital goods output. Interme-
diate goods production also fell, while capital goods manu-
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Issue 21-11 | Tuesday 7 December 2021
Shipments New orders
Jul/Aug Sep/Oct Aug/Sep Jul/Aug Sep/Oct Aug/Sep Jul/Aug
1.3 0.3 0.7 0.9 0.7 1.0 0.9
0.7 na na na 1.1 0.9 0.4
facturing was slightly up. The overall decrease in September
followed an even sharper fall in August, when manufacturing
output had been down by 4.3pc on the month.
Germany's motor vehicle and parts industry increased
output in September, but production in the mechanical engi-
neering sector fell sharply, the ministry said. There were also
substantial decreases in other sectors, including electrical and
data processing equipment.
Asia-Pacific
The Regional Comprehensive Economic Partnership (RCEP),
an Asia-Pacific trade agreement that will create the world's
biggest free trade zone, has been ratified and is due to take
effect 1 January 2022.
The RCEP was signed last year by 15 Asia-Pacific nations
covering around a third of the global economy. The deal is
designed to reduce tariffs and other trade barriers, and to
harmonise ways of determining the sources of goods to encour-
age regional trade flows. It brings together some of the world's
biggest commodity importers in China, Japan and South Korea
with exporters such as Australia, Indonesia and Malaysia.
The terms of the RCEP call for tariffs to be eliminated on
as much as 90pc of regional trade, with many of the changes
planned to be phased in over 10-20 years.
Japan's economy contracted during July-September, pres-
sured by an extended Covid-19 state of emergency in major
economic regions during the quarter.
Gross domestic product (GDP) shrunk at an annualised 3pc
rate for July-September compared with the previous quarter,
according to preliminary government data released.
The economy slowed from a revised 1.5pc growth in April-
June, recording the first drop in two quarters. Lower capital
expenditure and exports contributed to the negative economic
growth in Japan over July-September.
Japan's state of emergency was extended over July-
September, affecting economic and manufacturing activity in
the country's main business and industrial areas and denting
consumer spending.
Argus Global Waxes Issue 21-11 | Tuesday 7 December 2021

asia-pacific

Paraffin wax prices, Asia-Pacific

¢/lb $/t €/t
Low High Mid Low High Mid Low High Mid

fob north China

Fully-refined, bulk liquid 68.95 69.85 69.40 +6.81 1,520.00 1,540.00 1,530.00 +150.00 1,350.06 1,367.83 1,358.95 +169.39
Fully-refined, slab 70.76 71.67 71.22 +6.81 1,560.00 1,580.00 1,570.00 +150.00 1,385.59 1,403.36 1,394.48 +170.44
Semi-refined, slab 68.95 69.85 69.40 +6.81 1,520.00 1,540.00 1,530.00 +150.00 1,350.06 1,367.83 1,358.95 +169.39
fob south China
Fully-refined, slab 70.76 71.67 71.22 +6.81 1,560.00 1,580.00 1,570.00 +150.00 1,385.59 1,403.36 1,394.48 +170.44
Semi-refined, slab 68.95 69.85 69.40 +6.81 1,520.00 1,540.00 1,530.00 +150.00 1,350.06 1,367.83 1,358.95 +169.39
fob Thailand
Feedstock slack 36.29 49.90 43.10 -7.60 800.00 1,100.00 950.00 -167.50 710.56 977.02 843.79 -119.50

Paraffin wax prices in Asia continued on an upward trajec-
tory in November, as tight supply continued to lend support to
prices.
Demand was mostly steady, although market participants
noted some buyers withdrawing to the sidelines amid high
prices, opting to wait and see instead. Container scarcity also
continued to keep freight rates elevated, with delays in both
loading and unloading of cargoes seen by buyers and sellers.
Chinese paraffin wax export prices rose by $150/t in
November across the board, as firm domestic demand exacer-
bated supply availability. Domestic buyers were securing wax
supply for candle manufacturing ahead of the Lunar New Year
holiday in early February 2022, which led to reduced supply for
exports. Production in China was also curtailed with Sinopec’s
Shanghai Gaoqiao refinery still under maintenance, with wax
production expected to only resume around mid-December.
Chinese wax export prices were raised to $1,560-1,580/t for
Global paraffin wax arbitrages
N China vs NWE mid melt N China vs USGC mid melt
500
450
400
350
300
250
200
3 Nov 20 2 Feb 21 4 May 21 3 Aug 21 2 Nov 21
58/60°C fully-refined paraffin slab wax and $1,520-1,540/t for
58/60°C semi-refined paraffin slab wax. 58/60°C fully-refined
paraffin liquid wax prices were also raised to $1,520-1,540/t
fob. One supplier also noted even higher prices being offered
for other wax grades, with volume remaining limited.
One South Korea-based importer concluded nine fully-
refined 58/60°C container loads from Dalian and Fushun at
$1,540/t cfr Incheon for November delivery. The importer
noted limited availability from Dalian, resulting in having to
source cargoes from Fushun to fulfill requirements. Domestic
demand in South Korea was steady and is expected to remain
stable through January. Discussions for December cargoes
were ongoing, but deals were yet to conclude with one im-
porter citing difficulty in securing container vessels.
In India, demand showed signs of softening following the
Diwali holiday and festival season in the first-half of Novem-
ber. Demand for imports from China was also reduced with
higher prices and lower demand, prompting importers to be
on the sidelines. Domestic prices from state-owned Indian
Oil Corporation (IOC) type 2 pellet-form 64/66°C paraffin wax
was raised to 114,460 rupees/t ex-north Assam ($1,517/t) in
November, while prices from another state-owned refiner
Chennai Petroleum (CPCL) were at 114,910 rupees/t ex-Chennai
($1,523/t). Prices from the Numaligarh Refinery (NRL) were
at 117,069 rupees/t ($1,552/t) after being revised upwards by
5,000 rupees/t twice in the month.
hhh
Export prices for 60/62°C paraffin slab wax with less than
0.3pc oil from the wax producer based in Tokuyama, Yamagu-
chi, Japan rose slightly for volumes to the US at $2,500-3,500/t
cfr US west coast and east coast. Prices to Asia were un-
changed at $1,500-2,500/t cfr Asia, with the producer moni-
toring freight rates closely before adjusting prices further.

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asia-pacific

Demand in December is expected to remain firm with the year-
end peak season in full swing.
Feedstock slack wax prices from Thailand were lower in
November at $800-1,100/t fob Thailand on the back of lower
gasoil prices. However, price levels remain elevated compared
to earlier months, with demand remaining steady. One refiner
who was in discussions with buyers for term volumes in 2022
also noted an increment in premiums from $120/t in 2021 to
around $200/t, signalling continued healthy levels of demand.
Palm wax prices in November were wide-ranging at $1,430-
1,550/t fob southeast Asia, with price fluctuations attributed
to movements in prices in crude palm oil (CPO). CPO prices in
southeast Asia are expected to soften early next year after the
monsoon season, when greater labour availability will lead to
higher palm yields. Demand in November was similar against
previous months, with the gap between palm wax and paraffin
wax prices narrowing in recent months. In Vietnam, factory
operations faced varying degrees of disruptions caused by
fresh Covid-19 cases, following the government’s re-opening of
November was limited, with most not expecting significant
impact to wax prices. However, with wax prices already con-
sidered at high levels compared to recent years, buyers with
stocks in hand may opt to wait for both wax and freight prices
to soften before stocking up further.
Varying port congestions and Covid-19 control measures
are also expected to keep container vessel availability tight
and freight rates elevated. Freight rates from north China to
Thailand and Vietnam were at around $80/t and $600/t to the
US east coast.
Crude $/bl
Nymex WTI Ice Brent
90
85
80

the country in October. Demand is expected to remain steady

75
in the short term, with some potential slowdown due to the
festive holiday period.
70
Paraffin wax prices are expected to remain mostly stable
in the short term, supported by continued tightness in sup- 65
ply. Market reaction to the sharp drop in crude prices in late 3 Sep 21 28 Sep 21 20 Oct 21 11 Nov 21 6 Dec 21

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Argus Global Waxes Issue 21-11 | Tuesday 7 December 2021

europe

Paraffin wax prices, delivered northwest Europe bulk liquid

¢/lb $/t €/t
Low High Mid Low High Mid Low High Mid

Fully-refined, low-melt 78.39 80.43 79.41 +6.01 1,728.21 1,773.25 1,750.73 +132.40 1,535.00 1,575.00 1,555.00 +160.00
Fully-refined, mid-melt 79.41 81.45 80.43 +5.97 1,750.73 1,795.77 1,773.25 +131.72 1,555.00 1,595.00 1,575.00 +160.00
Fully-refined, high-melt 80.94 82.99 81.97 +5.93 1,784.51 1,829.54 1,807.03 +130.69 1,585.00 1,625.00 1,605.00 +160.00
Slack, 10-20% 56.18 58.22 57.20 +5.11 1,238.46 1,283.49 1,260.98 +112.49 1,100.00 1,140.00 1,120.00 +130.00

Wax prices moved up firmly across Europe again in November, Assessments in November for delivered northwest Europe
supported by tight supply and rising feedstock costs. fully refined paraffin wax grades rose by €160/t, and for slack
Availability continued to be challenging and offer prices waxes by €130/t.
from different refiners have continued to be in a significant The outlooks remains one of tight supply and high prices
range, with some offers seen as high as €2,000/t delivered to until at least January, according to market participants in
northwest Europe for November supplies. Europe.
Demand has so far stayed firm, particularly for the pharma- The outlook for wax production in Europe faces challenges
ceutical and industrial sectors. from a wave of Group I base oils plants closures including in
A new variant of Covid-19 caused a sharp slide in crude and France and Portugal this year. Italian firm Eni has told the
oil products prices in late-November, with the impact of mea- trade union representing workers at its 84,000 b/d Livorno
sures to curb the virus fast-changing and varying from country refinery that the site will stop producing fuels permanently
to country. Particularly stringent measures, including new from next year, but base oils production will continue. Livorno
lockdowns in the Netherlands, were making it difficult for busi- has been under maintenance in the lubricant part of the plant,
nesses to plan ahead and creating some logistical difficulties. while a fire at the refinery recently was quickly dealt with (see
Supply from Asia has been particularly tight, with Chinese news).
wax shipments stymied by ever higher container costs and Spain's Cepsa has scheduled a three-week planned turn-
some refinery supply issues. Prices have risen significantly dur- around at its 240,000 b/d Algeciras refinery from early Febru-
ing November, with rises of around $150/t for export supplies ary 2022 (see news).
of paraffin wax. The refiner will shut production at its 265,000 t/yr Group
Chinese domestic demand is firm, with candle buying in I base oil unit for routine maintenance. It is planning to start
the lead up to Lunar New Year celebrations in February, while
several refineries have limited supplies thanks to maintenance
or other logistical issues. Sinopec’s Gaoqiao refinery is still European wax and base oil premiums to feedstock €/t
under maintenance, while the Petrochina Fushun plant had
limited supply for export thanks to logistical constraints, limit- Slack wax vs VGO SN 150 vs VGO
FR mid melt vs VGO
ing supply from two of the largest wax-producing refineries in 1200
Asia.
European supply has also been tight and prices have been 1000
rising strongly. Some Mediterranean producers were now of-
fering product at €2,000/t or higher, but buyers in northwest 800
hhh
Europe reckoned such levels were too high and opted to look
600
at other supplies in a range sometimes more or sometimes less
than the €1,600/t range. 400
One eastern European refiner was still short of product
after production issues and was offering product around 200
€1,700/t, according to traders. Dec 20 Mar 21 Jun 21 Sep 21 Dec 21

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Argus Global Waxes Issue 21-11 | Tuesday 7 December 2021

europe

stockpiling base oils from January to cover its subsidiary and the continent. The UK held the top spot for exports in August,
contractual obligations during the shutdown. The shutdown increasing volumes by almost 50pc to 12,000t. Germany and
will curb the refiner's spot availability of Group I base oils and the Netherlands were behind the UK, exporting 6,250t and
waxes from the beginning of next year. 4,400t of waxes respectively.
The overall volume of paraffin wax imported into Europe South African exports increased markedly to 19,000t from
increased by 4pc to 49,000t in August, according to data from 6,600t the month before.
GTT. Imports to Europe from all regions were lower on the
month, except for Asian imports, which increased by 32pc to
23,200t and surpassed intra-European imports for the first European fully refined premium to slack wax €/t
time in over a year.
While the majority of planned maintenance had been FR paraffin low melt vs slack wax
FR paraffin mid melt vs slack wax
completed in the first half of the year, high temperatures and FR paraffin high melt vs slack wax
other production issues impacted the spot market in Europe 500
and limited supply in August. Demand on the other hand in-
450
creased, so buyers had to look further afield for waxes.
Germany, followed by Poland held the top spot for paraffin 400 hhh
wax imports in August, both with volumes over 11,000t. Neth-
erlands was behind the two, increasing the wax it imported 350

by just over 40pc to 9,500t. The Netherlands has increased 300

its imports by almost five-fold in the three months leading to
August. 250
Paraffin waxes exported by European countries rose by 3 Nov 20 4 May 21 2 Nov 21
just over 14pc to 28,800t in August. Close to 90pc of the wax
exported during the month by European countries stayed on

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AMERICAS

Paraffin wax prices, fob US Gulf bulk liquid

¢/lb $/t €/t
Low High Mid ± Low High Mid ± Low High Mid ±

Fully-refined, low-melt 80.00 87.00 83.50 +3.00 1,763.70 1,918.02 1,840.86 +66.14 1,566.52 1,703.59 1,635.06 +105.25
Fully-refined, mid-melt 82.00 89.00 85.50 +3.00 1,807.79 1,962.11 1,884.95 +66.14 1,605.68 1,742.75 1,674.22 +106.40
Fully-refined, high-melt 82.00 89.00 85.50 +3.00 1,807.79 1,962.11 1,884.95 +66.14 1,605.68 1,742.75 1,674.22 +106.40
Slack, low-melt 68.00 75.00 71.50 +5.00 1,499.14 1,653.47 1,576.31 +110.23 1,331.54 1,468.61 1,400.08 +136.32
Slack, mid-melt 68.00 75.00 71.50 +5.00 1,499.14 1,653.47 1,576.31 +110.23 1,331.54 1,468.61 1,400.08 +136.32
Slack, high-melt 70.00 77.00 73.50 +5.00 1,543.24 1,697.56 1,620.40 +110.24 1,370.70 1,507.77 1,439.24 +137.47

US fully refined petroleum wax and slack wax spot prices con-
tinued to increase on tighter supply and firm demand.
Some US Group I base oil refiners considered reducing
operating rates in order to limit inventories ahead of year-end
taxes. This put downward pressure on the availability of wax
feedstock.
Imports from China also remained limited because of more
attractive prices in Europe. Shipping logistics from China to
the US remain difficult because of high freight rates and lim-
ited cargo availability.
Demand for wax also remains firm from the candle and
construction sectors. Candle demand is firming on typical sea-
sonal factors, while construction demand is firmer than usual
for the time of year.
Persistent tightness throughout the year has limited some
customers from catching up on wax back orders and kept pres-
sure on some of them to acquire as much volume as possible.
US petroleum wax production in September fell by 25pc
from levels in August as refinery operating rates dipped into
the low-80s pc. Output in September remained above the 2020
monthly average amid continued tight supply of wax.
Output in September was 150,000 bl, down from 200,000
bl produced in August. Production in September rose by 4.9pc
from levels of 143,000 bl a year ago.
US petroleum wax consumption in September rose to its
highest in more than three years as consumers responded to
pent-up demand from the first half of the year. Consumption
was also increased because of increasing activity in the candle
and construction sectors.
Petroleum wax consumption rose to 253,000 bl, an increase
of 76pc from 144,000 bl in August. Consumption more than
doubled from year-ago levels of 106,000 bl.
US petroleum wax imports in September increased to their
highest since April on continued firm demand and increased
production in Asia. Imports in September rose to 204,000
bl, an increase of 11pc from 184,000 bl imported in August.
Imports in September rose by 91pc from year-ago levels of
107,000 bl.
Imports in September from Singapore rose to 43,000 bl,
compared with no imports in August and 12,000 bl in July.
That was the highest total from Singapore since December. Im-
ports from China rose to 27,000 bl from 4,000 bl. Imports from
Malaysia rose to 25,000 bl from 6,000 bl. That was the highest
since July 2018.
US petroleum wax inventories fell to 491,000 bl in Septem-
ber, down by 9.6pc from 543,000 bl in August. Inventories rose
by 0.4pc from 489,000 bl a year ago.

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Argus Global Waxes Issue 21-11 | Tuesday 7 December 2021

Production and sales

US wax production, sales ’000 bl US wax production by region ’000 bl

Production Series US Atlantic coast US Midcontinent US Gulf coast

300 200

250
150

200
100

150

50
100

0
50

0 - EIA
-50 - EIA
Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21

US wax stocks ’000 bl

阿格斯中国基础油周报 Apr-21 Jun-21 Aug-21

- EIA

580

560

540

520

500

480

460

440

420

400 - EIA
Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21

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Argus Global Waxes Issue 21-11 | Tuesday 7 December 2021

PLANT MAINTENANCE

Group I base oil and wax plant maintenance

Refiner Location Timing Capacity Capacity affected Cause

Asia-Pacific
Eneos Negishi, Japan By Oct 2022 210,000 t/yr All Closure
Shell Bukom, Singapore July 2022 380,000 t/yr All Closure
Sinopec Gaoqiao, China Oct to Dec 2021 600,000 t/yr All Maintenance
Eneos Kainan, Japan 10 May 2021 for 45 days 200,000 t/yr NA Maintenance
Eneos Mizushima B, Japan 14 Feb to 14 Jun 2021 225,000 t/yr All Maintenance
Nippon Seiro Tokuyama, Japan May for one month 90,000 t/yr wax unit All Maintenance
PetroChina Fushun, China Early-March until end-May 420,000 t/yr wax unit Wax Maintenance
IOC Digboi, India Feb to April 2021 60,000 t/yr wax unit Wax Maintenance
Europe, FSU and Africa
Cepsa Algeciras, Spain February 2022 for three weeks 270,000 t/yr Group I Maintenance
Eni Livorno, Italy 15 November for one month 600,000 t/yr Group I Maintenance
Tupras Izmir, Turkey Aug-Sep 2021 400,000 t/yr All Operational issues
Galp Porto, Portugal May 2021 180,000 t/yr All Closure
Total Gonfreville, France May 2021 240,000 t/yr All Closure of base oils
Mol Szazhalombatta, Hungary May 2021 for 5-6 weeks 195,000 t/yr Group I Maintenance
Sapref Durban, South Africa May to mid-June 2021 175,000 t/yr CD3 Maintenance
Lotos Gdansk, Poland Early-April 2021 for 4-5 weeks 245,000 t/yr All Maintenance

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Argus Global Waxes
News and analysis
Cepsa plans February base oil unit maintenance
Spanish integrated firm Cepsa has scheduled a three-week
planned turnaround at its 240,000 b/d Algeciras refinery from
early February 2022.
The refiner will shut production at its 265,000 t/yr Group I
base oil unit for routine maintenance.
It is planning to start stockpiling base oils from January
to cover its subsidiary and contractual obligations during the
shutdown.
The shutdown will curb the refiner's spot availability of
Group I base oils and waxes from the beginning of 2022.
Group I prices in Europe have mostly stabilised in recent
weeks, after falling from June. The Argus domestic northwest
Europe Group I SN 150 price fell by 25pc from the end of May
to $977.50/t in early-November. European light neutral prices
have remained stable mostly in November. Heavy grades con-
tinue to face downward price pressure from slowing regional
demand and lingering surplus supplies.
Livorno explosion impacts lube plant area
Italian integrated energy firm Eni has confirmed that a fire
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Issue 21-11 | Tuesday 7 December 2021
at its 84,000 b/d Livorno refinery on 31 November was in the
lubricant plant area, part of which was shut for routine main-
tenance.
The fire broke out following an explosion, attracting emer-
gency responses from as far away as Florence, around 100km
inland. It was extinguished in under an hour and no one was
injured, Eni said. The cause is being investigated.
The Livorno refinery houses a 600,000 t/yr Group I base
oils unit, as well as storage and lubricant blending facilities.
It is not clear what impact the fire will have on production of
base oils and finished lubricants.
Base oils production at Livorno was halted in mid-Novem-
ber for maintenance and is scheduled to complete in mid-
December.
Eni produces SN 90, SN 150, SN 500, bright stock and wax
at Livorno, which is supplied to domestic customers by truck,
and to overseas markets by bulk and flexi-tank.
Eni plans to permanently halt fuels production at Livorno
next year, but base oils production will continue.
Italy lube demand recovers in September
Italy’s September finished lube demand rose to a five-month
high of 35,200t after a seasonal slowdown in August.
September demand was up by 61pc (13,400t) on August
levels of 21,800t, but was 3pc — 1,000t — down compared with
year-earlier levels. Base oil and finished lubricant demand is
usually lower in August when businesses reduce or halt opera-
tions for summer holidays.
Demand in August hit its lowest since April 2020, when Ital-
ian blenders and finished lube sellers reacted to early imple-
mentation of lockdowns at the start of the Covid-19 pandemic.
September year-on-year demand and demand in the first
nine months of the year has mostly returned to pre-Covid-19
levels. Total lubricant demand for the first nine months of this
year (300,000t) was 14pc higher than the same period in 2020
(263,500t), but only 3pc lower than the first nine months of
2019 (308,400t).
Production of finished lubricants to August this year was
higher than pre-pandemic levels. Italy's production of finished
lubricants rose by 21pc in the first eight months of this year to
756,180t, compared with year earlier levels of 627,521t and by
40pc in comparison to the same period in 2019.
Firmer September lubricant demand coincided with a
decline in Europe’s Group I base oil prices. Domestic prices for
Page 11 of 14
Argus Global Waxes Issue 21-11 | Tuesday 7 December 2021

News and analysis

SN 150 in NW Europe fell by 13pc ($170/t) between the begin-
ning of June and the beginning of September. Many blenders
have not yet implemented price reductions for finished lubri-
cants amid tumbling Group I base oil prices.
Germany’s lube demand falls in August
Germany’s domestic sales of lubricants and base oils fell for
the second month in a row in August as blenders reduced
operations in the summer.
German lubricant demand fell by 9pc to 71,725t in August
from month earlier levels. Demand had risen in the three
months prior, from April to June. Lubricant and base oil
demand in August was impacted by a seasonal slowdown as
Mediterranean blenders reduced or closed operations for the
summer holidays.
August demand was up by 42pc on year earlier levels of
50,515t. Lubricant demand in August 2020 was the lowest since
April that year when lockdowns in response to the spread of
Covid-19 were initially implemented in Germany and across
Europe.
The fall in demand in August was largely driven by lower
motor oil sales, down by 12pc to 15,880t. Demand for hydraulic
oils also fell by 18pc to 6,935t, while demand for process oils
rose by 8.5pc to 11,200t.
Lower August demand coincided with the flooding of the
Rhine in late July to early August. Flooding resulted in logisti-
cal difficulties and disruption of barge transport from the ARA
hub into Germany. This disruption could have added to the
slowdown in August base oil and lubricant sales.
Export volumes in August were at their highest since
4.01mn bl in May 2018.
US' base oils production remained elevated in August,
which allowed for more export volumes to be offered. Exports
from the US were constrained in the second quarter because
of production losses in February stemming from unprecedent-
ed winter weather in the southern US and US midcontinent.
The increase in production created length in the US of pri-
marily light and extra-light grades. This led to export volumes
in August to India of 299,000 bl, the highest volume to India
since year-ago levels of 314,000 bl.
Export volumes to Israel rose to 181,000 bl in August, the
highest since 326,000 bl in July 2020. It was the second time in
the past year that volumes to Israel exceeded 100,000 bl.
US' base oil exports in August to Mexico rose to 1.22mn bl,
the fifth consecutive month above the 1mn bl level. Exports in
August rose by 19pc from 1.03mn bl in July and by 29pc from
943,000 bl a year ago.
Exports to Brazil in August fell to 288,000 bl, the lowest
level since February. That was a drop of 18pc from levels in
July of 352,000 bl and a drop of 49pc from 560,000 bl a year
ago.
VGO $/bl
VGO 0.5% NWE barge VGO 1.6% NWE barge
650
600

US' August base oil, lube exports rise

550
US' August base oil and lubricant exports returned to a more
than three-year high on increased movement to India and
Israel and continued firm demand from Mexico. 500
Export volumes in August rose to 3.75mn bl, an increase of
23pc from 3.04mn bl in July, according to the US Energy Infor- 450
mation Administration. Export volumes in August rose by 9.6pc 7 Sep 21 29 Sep 21 21 Oct 21 12 Nov 21 6 Dec 21
from year-ago levels of 3.42mn bl.

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Argus Global Waxes Issue 21-11 | Tuesday 7 December 2021

Imports and exports

US wax imports, exports ’000 bl Thailand paraffin wax < 0.75% oil imports, Sep

300 Country Volume t Volume % Year-over-year %±

250 Imports Exports Net imports
Japan 616.47 44.82 74.35
200

150 China 521.50 37.91 -65.92

100 Malaysia 223.38 16.24 63.49
50
Netherlands 14.10 1.03 na
0
South Korea 0.00 0.00 na
-50

-100 #N/A 0.00 0.00 na

-150 #N/A 0.00 0.00 na

-200 - EIA #N/A 0.00 0.00 na
Oct-20 Dec-20 Feb-21 Apr-21 Jun-21 Aug-21

Others 0.00 0.00 -100.00

Total 1,375.45 100.00 -33.14

South Korea paraffin wax < 0.75% oil imports, Sep South Africa paraffin wax < 0.75% oil exports, Sep

Country Volume t Volume % Year-over-year %± Country Volume t Volume % Year-over-year %±

China 655.83 63.80 -10.27 Germany 3,462.00 43.76 1.76

Japan 143.64 13.97 -3.57 US 2,127.00 26.89 -19.91

Malaysia 108.00 10.51 44.00 Italy 473.20 5.98 132.78

South Africa 51.27 4.99 209.16 China 387.70 4.90 -28.82

Spain 35.98 3.50 na Singapore 261.80 3.31 -16.33

Taiwan 16.80 1.63 na Japan 200.95 2.54 -34.01

Germany 12.30 1.20 175,642.86 Turkey 176.80 2.23 1,162.86

Netherlands 3.67 0.36 na Brazil 139.36 1.76 -41.37

Others 0.50 0.05 -80.06 Others 682.01 8.62 -50.15

Total 1,027.99 100.00 5.55 Total 7,910.82 100.00 -12.52

Japan paraffin wax < 0.75% oil exports, Sep

Country Volume t Volume % Year-over-year %±

Germany 825.60 61.26 500.00

South Korea 148.77 11.04 27.39

China 141.09 10.47 112.84

India 73.47 5.45 36.38

Thailand 35.84 2.66 225.75

US 24.44 1.81 1,015.98

Hungary 22.38 1.66 na

Malaysia 19.34 1.44 na

Others 56.76 4.21 -96.72

Total 1,347.70 100.00 -36.45

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Argus Global Waxes Issue 21-11 | Tuesday 7 December 2021

Imports and exports

US wax exports
Volume t Cif value ($/t) Volume t Cif value ($/t)

August August YTD-August YTD-August

Paraffin wax < 0.75% oil 2,490.88 1,960.87 24,266.72 1,664.43

Mineral wax, other 19,566.62 1,328.11 128,041.87 1,247.56
Vegetable wax, other than TG 533.48 3,461.69 4,320.15 3,465.48
Beeswax 167.40 4,189.70 1,162.80 4,633.17
Candles 3,833.81 5,325.91 29,027.35 5,417.91
Data: US Census

US wax imports
Volume t Cif value ($/t) Volume t Cif value ($/t)

August August YTD-August YTD-August

Paraffin wax < 0.75% oil 8,628.19 1,897.95 133,175.42 1,283.64

Mineral wax, other 17,470.44 1,251.60 112,687.41 1,077.76
Carnauba wax 343.04 7,706.22 3,234.70 6,180.73
Candelilla wax 20.63 8,078.30 324.19 8,390.82
Vegetable wax, other than TG 197.27 2,663.90 1,076.29 3,439.50
Beeswax 255.68 7,073.21 2,388.44 6,487.06
Montan wax 74.25 3,618.36 670.12 2,930.62
Candles 31,521.40 3,589.80 209,656.33 3,296.71
Data: US Census

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