ILMA Compoundings - September 2020 - 17

ICIS Group II Domestic/Export Prices

Crude Futures
80.00

2.5

60.00
2.0
40.00
1.5

???

00.00

1.0

-20.00
0.5
-40.00
-60.00

NYMEX WTI

ICE Brent

Group III material began arriving in the U.S. in July to
fairly strong demand after inventories of material that had
arrived earlier in 2020 were worked down.
As length was cleared, support for higher spot prices was
seen in the market, and temporary voluntary allowances fell
away by the end of July.
ICIS Group II domestic and export prices strengthened,
with export prices moving more in line with domestic
market prices after falling as low as $1 per gallon during the
COVID-19 downturn.
PENT-UP DEMAND KICKS IN, LONGER-TERM
RECOVERY SLOW
The announced increases spurred a buying rush, with
customers looking to restock in order to fill tanks and to
get ahead of price increases. The steep price discounts noted
during the second quarter were gone, with suppliers holding
firm on offer levels given razor-thin margins.
Players largely anticipated that this pent-up demand
rush would ease given that downstream sectors, especially
finished lubricants, were expected to recover slowly into
2021 - and beyond in some cases, such as OEMs.
"The global automotive industry is still in the middle of a
deep crisis," said Jincy Varghese, ICIS demand analyst. 

GII Exports

GII Domestic

Varghese, citing Oxford Economics, said more than
20% of planned light vehicle production was wiped out in
the first half of 2020. "Most global auto companies have
restarted operations, but there are still several bottlenecks,
including subdued demand, supply chain disruptions and
slower line speeds," Varghese said. 
Globally, May sales were down by 33% year on year
compared with the all-time low in April, when sales were
down by 45% year on year, Varghese said.
The U.S. economy continued to be weighed down by the
pandemic at midyear. "Lower government budgets, limited
credit and low savings levels are also likely to hinder investment in the second half," Varghese said.
The pent-up demand spike prompted a recovery to 70%-
90% of pre-COVID-19 volume levels, but true recovery was
expected further out - anywhere from late 2021 to 2023.
Auto sales are not expected to fully recover for two to
three years, impacting factory fills.
Hay is senior editor manager at ICIS. She may be
reached at amanda.hay@icis.com.

17

Jul 20

Jun 20

May 20

Apr 20

Mar 20

Feb 20

Jan 20

14-May

07-May

23-Apr

30-Apr

16-Apr

09-Apr

02-Apr

19-Mar

26-Mar

12-Mar

27-Feb

05-Mar

13-Feb

20-Feb

06-Feb

23-Jan

30-Jan

09-Jan

0.0
02-Jan

$/bbl

20.00



ILMA Compoundings - September 2020

Table of Contents for the Digital Edition of ILMA Compoundings - September 2020

ILMA Compoundings - September 2020 - Cover1
ILMA Compoundings - September 2020 - Cover2
ILMA Compoundings - September 2020 - 1
ILMA Compoundings - September 2020 - 2
ILMA Compoundings - September 2020 - 3
ILMA Compoundings - September 2020 - 4
ILMA Compoundings - September 2020 - 5
ILMA Compoundings - September 2020 - 6
ILMA Compoundings - September 2020 - 7
ILMA Compoundings - September 2020 - 8
ILMA Compoundings - September 2020 - 9
ILMA Compoundings - September 2020 - 10
ILMA Compoundings - September 2020 - 11
ILMA Compoundings - September 2020 - 12
ILMA Compoundings - September 2020 - 13
ILMA Compoundings - September 2020 - 14
ILMA Compoundings - September 2020 - 15
ILMA Compoundings - September 2020 - 16
ILMA Compoundings - September 2020 - 17
ILMA Compoundings - September 2020 - 18
ILMA Compoundings - September 2020 - 19
ILMA Compoundings - September 2020 - 20
ILMA Compoundings - September 2020 - 21
ILMA Compoundings - September 2020 - 22
ILMA Compoundings - September 2020 - 23
ILMA Compoundings - September 2020 - 24
ILMA Compoundings - September 2020 - 25
ILMA Compoundings - September 2020 - 26
ILMA Compoundings - September 2020 - 27
ILMA Compoundings - September 2020 - 28
ILMA Compoundings - September 2020 - 29
ILMA Compoundings - September 2020 - 30
ILMA Compoundings - September 2020 - 31
ILMA Compoundings - September 2020 - 32
ILMA Compoundings - September 2020 - 33
ILMA Compoundings - September 2020 - 34
ILMA Compoundings - September 2020 - 35
ILMA Compoundings - September 2020 - 36
ILMA Compoundings - September 2020 - 37
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ILMA Compoundings - September 2020 - 40
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