Recently, the lubricating oil industry has set off again, and information about price increases is overwhelming. At the beginning of 2017, major brands of lubricants began to line up for price increases: Philips66 increased the price by 5%, and the new price was implemented on February 27; the US Citgo brand increased by 3%-5%, and the new price was implemented on March 1; Egypt XxonMobil increased its price by 5%, and implemented the new price on February 22; Chevron increased its price by 5%, and implemented the new price on March 6; Omni increased its price by 5%-8%, and implemented the new price on February 22; The price of the Cam2 brand in the United States will increase by 5%-8%, and the new price will be implemented on February 22; the price of Shell will be increased by 5%, and the new price will be implemented on February 20.
Prices of raw materials such as base oils and additives have risen
Throughout the second half of 2016, due to weak demand in the domestic base oil market, the overall market price tended to be in a weak consolidation phase; but at the end of the year, the crude oil market was positive, first at the end of November, the Organization of the Petroleum Exporting Countries (OPEC) reached the first production cut in 8 years Agreement, market sentiment was greatly encouraged, and oil prices closed soaring by nearly 9%. Just as the market was about to digest this good, another good hit came. On December 10, the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing countries reached the first joint production cut since 2001 in Vienna. The agreement set the largest reduction in the history of non-OPEC oil-producing countries. International crude oil prices continued to rise sharply, base oil ushered in a rising trend, mainstream prices rose by 10-20%, and individual models rose by 23%. The production cost of lubricating oil companies has increased by about 1,000 yuan/ton in about a month, which has also become the main reason for the price increase of many lubricating oil brands.
On the other hand, as another indispensable part of lubricants, the price of additives is also showing an upward trend. Since the third quarter of 2016, the import price of additive raw materials has risen due to foreign exchange factors. At the same time, affected by policy factors, most factories have restricted or stopped production, the market supply has fallen and costs have risen.
The price of lubricating oil packaging materials soared
Since November 2016, with the increase in international crude oil prices, the price of coking coal has increased by 200%; the price of PVC has increased by 60%; the price of glass has increased by 40%; the price of plastic has increased by 30%; the price of aluminum has increased by 30%; the price of steel has increased by 30% %; Stainless steel also exploded by 40%! Among them, raw materials, mainly plastic, steel, and paper, are closely related to the production and supply chain of lubricant companies. Every cent increase in these raw materials will put significant pressure on the production of lubricants, which in turn will affect market operations.
At present, the main raw material polyethylene for the production of plastic products is petroleum derivatives. Due to the recent increase in crude oil prices, the price of raw materials such as polyethylene has increased by nearly 40%. The price of plastic barrels for small packaging has increased by 15%, and the price of plastic barrels in barrels has increased by 20%. , The rise in production costs has become the main cause of price increases.
Logistics transportation costs rise
Since September 21, 2016, the "Administrative Regulations on Over-limit Transport Vehicles on Highways" jointly issued by the state's multiple ministries and commissions has directly led to a 33.6% increase in the unit price of freight. Together with the corresponding increase in taxes, the actual freight has increased by more than 35%. Subsequent regulations against illegal over-limit and overloading of hazardous chemical transport vehicles have further aggravated the tightness of capacity and the rise of freight prices. Recently, due to environmental protection pressures such as the control of smog, restrictions on large trucks have become increasingly strict, transportation capacity has continued to be tight, and prices have continued to rise.
On the whole, with the rising trend of several major factors such as lubricant raw materials, packaging and logistics costs, the price increase of finished lubricants is inevitable. 2017 is a very critical year for lubricating oil practitioners. Continuously enhancing brand value and improving product quality are still the keys for private lubricating oil companies to break through this tide of price increases.
