INSIGHT Base Oil Report
Samantha Wright, Senior Editor Manager
Europe European domestic base oils players were on the sidelines in mid-March, assessing the impact of the ongoing Russia/Ukraine conflict. Producers’ concerns around feedstock and operating costs are growing, while buyers are focused on securing reliable volumes in the second quarter. Uncertainty has added another layer of pressure with players bracing for sanctions on Russian oils. European export prices rose this week amid negative margins to vacuum gas oil (VGO) and increased demand. Buying interest for export volumes has risen in March as players try to assess available volumes, particularly amid a lack of material from Russia.
US
US base oil prices jumped up in the first half of March amid significant hikes in feedstock costs. Supplies are sufficient to meet domestic demand, which continues to be constrained by additive shortages, but refiners are holding firm to new price levels given margin erosion. Spot supplies of 100N have been pulled as refiners prioritise diesel production instead given the premium of ULSD over 100N base oil. There is also an expectation of increased demand pull on US Group II from Europe as Group I tightens with less Russian supply.
Asia Group I Asia prices for all grades moved up in mid-March as crude and gasoil prices soared. Deals and discussions were thin as refiners were holding back on their offers in view of volatile upstream prices. Buyers in China were generally resistant to refiners’ staunch offers, which resulted in
52 LUBE MAGAZINE NO.168 APRIL 2022
a widening price gap. That said, suppliers noticed a marked increase in enquiries from Indian customers. Group III prices largely increased on higher April selling indications from South Korean refiners amid rising cost pressure.
Middle East
Middle East base oils prices were largely firmer on higher offers and discussions, driven by higher production costs following recent gains in crude oil prices. The exception was in Group III prices, which were stable on unchanged offers from the main suppliers in the region.
LINK
www.icis.com
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