INSIGHT Base Oil Report Europe

Domestic prices in Europe were steady at the start of March, with some upwards pressure noted in the Group I market amid tightening supply. SN150 material is balanced to tight, while SN500 is balanced. The main cause of the shortages continues to be refiners favouring low sulphur fuel oil (LSFO) production amid the IMO 2020 regulations. Brightstock material is tight domestically amid the ongoing production issues at Total’s Gonfreville plant. Margins have significantly improved over the past few weeks, following very narrow margins at the beginning of the quarter. The Group II market is balanced, with healthy supply offset by normal levels of demand. Availability OF Group III material seems to be tightening in some cases, particularly where players are buying Russian material. There is still enough material domestically in Europe to fulfil demand currently however. There are several planned turnarounds coming up in the market which could impact supply levels. European export, Baltic Sea export and Black Sea export values are all stable in early March. Supply is limited in the European export market, particularly for lighter grades. Demand has grown in the European export market from buyers in West Africa, Turkey and the Middle East in late February and early March. Availability of lighter grades is also limited in the Baltic Sea export market, while a rise in demand from Turkey and the UAE is putting pressure on supplies in the Black Sea export market.

US base oils domestic and export prices were stable at the beginning of March amid slightly lower supply and limited demand. The market has been balanced to tight in recent weeks, with spot availability reduced from several suppliers. Stock levels are anticipated to balance out in the coming weeks with the Excel Paralubes plant expected to restart after a planned turnaround. Strong demand was seen in the first half of the first quarter, though buying interest has since waned. Spring is typically a peak season for lubricant blending, but a surge of demand was seen earlier than expected this year. It is likely the second quarter will see slower demand than usual due to weak lubricants interest globally.


In Asia, Group I and Group III domestic prices were largely steady amid limited trading activity. There is limited availability of Japanese and southeast Asian cargoes in the Group I market. Demand for SN500 has spiked as a result of the reduced supply. In the Group II market, 150N prices were stable-to-soft on lower deals and offers noted at the beginning of March. Overall base oils buying interest is still lukewarm on the back of fluctuating crude oil prices and continued concern over the spread of the coronavirus outbreak.

Middle East

Middle East prices for Group I and Group III base oils increased at the beginning of March, while Group II values remained stable. Group I supply has tightened in Iran, due in part to the coronavirus outbreak. Some players in the UAE were contemplating using Group II material as a substitute, though there were limited deals seen on the market amid strong pricing competition and healthy availability.



Samantha Wright Markets Editor, ICIS



Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56