With the oil market in such a poor state, is there still a future for recycled oil?
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With the continuous decline in international oil prices and a severe slowdown in the domestic economy, there has been a serious surplus of lubricating oils. Hydrogenation plants invested in by various entities and individuals will begin operating one after another in 2016, leading to widespread use of base oils for type 2 hydrogenation, and as a result, their prices keep falling. Today, cheap Category 2 oils have encroached on the market share of traditional Category 1 oils. Recycled oils were originally products that existed between Category 1 oils and non-standard oils; in such a harsh environment, will there still be a golden age for companies dealing in recycled oils? ? Welcome everyone to join the discussion
I forgot to mention an important factor: as of July 1 this year, the value-added tax, which was previously exempted in full, now has a levy rate of 50%. In other words, the financial situation for companies that produce recycled oil has worsened further; what was once exempt from taxes now requires them to pay 8.5% value-added tax. What does 8.5% mean? I think these companies’ gross profits may not even reach that amount.