Clean Harbors Inc. warned customers that it has “significantly” raised waste oil collection fees to offset depressed base oil, vacuum gas oil and recycled fuel oil prices.
The increase comes in the wake of an announcement by ExxonMobil that it had reached a production rate of 3.2 million barrels per day – its highest 40 years. This could impact the rerefining segment further as availability of virgin feedstocks continues to rise.
The company’s rerefining subsidiary Safety-Kleen revised it fees for the collection of used engine and industrial oils in the U.S. and Canada. The changes are effective immediately.
According to Brian Weber, president of Safety-Kleen Sustainability Solutions, the declines in prices of virgin material and waste feedstock have impacted the value and return on rerefined products. Weber also thinks current market conditions will carry on in this direction.
“We must significantly raise our rates to address the market-derived pressure and avoid further deterioration in the financial performance of our SKSS segment,” Weber said. “These rate changes are needed for Safety-Kleen to continue to perform and be appropriately compensated.”
Safety-Kleen produces 574,000 metric tons per year of API Group II base oil from six plants across the U.S. and Canada. It collects waste oil from more than 100,000 customers.