Benzoil - We Buy Waste Oil

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Benzoil - We Buy Waste Oil
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• Waste oil is typically any kind of insulating
  fluid that has been used in a machine like a
  motor vehicle, truck or other industrial asset as
  a lubricant or heat transfer medium.  At the end
  of its useful life it can no longer perform
  satisfactorily as its inherent properties have
  been diminished it becomes a used oil or waste
  oil.  The oil then has a path to disposal, and
  there are well established networks to collect,
  process and reuse these oils.

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• We buy waste oil in some circumstances and it
  is useful to understand the background behind
  valuation and how the concept of payment for a
  waste material evolved.  Depending on the price
  crude oil internationally, as represented by the
  oil barrel price, e.g. WTI, Brent crude etc., the
  value of waste oil fluctuates.  Even diesel
  terminal gate pricing tends to track oil barrel
  prices. 

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• The key drivers in the value of waste oil are
  what the large users of it are prepared to pay,
  and the large users are the big scale
  re-refiners.  Re-refiners with sophisticated
  plants and technology regard used oil as a
  feedstock into their process to make a base oil
  or other products.

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• At time of writing the oil barrel price is
  near historic lows internationally, and right now
  the value of used oil in the Australian market is
  low.  Why is this the case?  How are they
  related?  The price that re-refiners can sell
  their output product for, i.e. their base oil, is
  governed by the international price for virgin
  base oils, which closely follows oil barrel
  pricing. 

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• Therefore if re-refiners are manufacturing at
  a fixed cost and the sale price of the product
  drops, it follows that what they are prepared to
  pay for inputs is reduced.  There is at the
  moment a glut of waste oil on the market for this
  reason and the simple supply and demand economics
  apply.

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• In the right circumstances Benzoil and others
  do buy waste oil, and there are some waste oils
  that are more attractive than others, e.g. light
  clean oils that havent been carbonised or
  scorched will attract more interest than dirty
  black sump oil.  Generally the types of waste oil
  for collection will be black oil or light oil and
  the criteria determining what they are worth

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• and what we can pay for waste oil has to do
  with the volume, location, type of oil,
  complexity of collection (e.g. is oil in a tank
  or in assets that need to be dismantled or pumped
  from), analytical results showing contaminants
  including solids, particulate matter, solubles,
  moisture, sludge, other chemical by-products.

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• http//benzoil.com.au/