INSIGHT Base Oil Report
Samantha Wright, Senior Editor Manager
Europe European domestic Group I and Group II prices were unchanged in mid-September, while GIII values continued an upwards trajectory. Domestic Group I activity was slow as sellers and buyers reached an impasse over pricing ideas. Group II supply and demand fundamentals remained stable, though players are concerned over a possible impact on imports from the US following Hurricane Ida. Group III availability remains very constrained and it is unclear when supply will improve. European Group I export values were stable to soft this week, while Baltic Sea and Black Sea export prices slipped down.
The European export market remains tight, but there is more supply compared to August. Availability has reached a more balanced level in the Baltic Sea following months of tightness. Demand for Group I export material is healthy from destinations including Turkey, Nigeria, the US and South America.
US
US base oils prices were stable across all grades in the first half of September, in the aftermath of Hurricane Ida. Base oil production escaped major damage, and refining rates are expected to normalise. Ship and rail logistics were hit hard.
New Orleans-area terminals shut due to power loss, which will cause further delays in an already constrained supply chain. Delivery of Group III base oils that are imported and stored in the area may be delayed but have resumed. An additive facility in the area also faced power loss. Supply and demand balances remain largely the same as before Ida, but logistics delays are likely worse. Additive and blending operations in the affected area could further dampen base oil demand.
Asia
Asian base oils Group I values decreased while Group II and Group III prices held steady in mid-September. Availability increased at the end of the third quarter and this led to downwards pressure on the Group I market in particular.
Buyers mostly retreated to the sidelines and were non-committal in their purchases in view of rapidly declining prices in recent weeks.
Middle East Middle East Group I prices for SN500 softened in mid-September, while prices of other Group I and Group II prices held steady in quiet trade. Group III ex-tank prices were stable-to-soft on lower 8cst offers in the United Arab Emirates (UAE). The markets were generally subdued at the end of the third quarter.
LINK
www.icis.com
LUBE MAGAZINE NO.165 OCTOBER 2021
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