INSIGHT
Base Oil Report
Europe European domestic Group I spot prices decreased for November under pressure from reductions in the export market. Domestic Group I market conditions remain balanced in Q4 with downward pressure expected to continue until the year-end.
Group II prices were stable to soft, with low viscosity grades in healthier supply in comparison to heavier grades. Group III remains on an uptrend due to severe supply shortages of 4cSt. Spot availability for 4cSt is likely to remain tight, supporting prices at record high levels.
European export prices dipped slightly in early November due to ongoing limited demand. After a busy October with a number of deals taking place at substantial price reductions activity slowed in mid-Q4 due to lack of buying interest.
November is expected to be the last full month of trading activity before destocking begins in December. 584
US
Domestic US prices were stable across the board in early November, while light and mid-viscosity Group II export prices fell further. Market fundamentals were largely unchanged. Mid-viscosity oils had some length, while light and heavy grades were generally balanced. Suppliers were managing excess supplies through export, but not all suppliers were willing to engage in export markets due to low price indications and heavy competition from material originating from Asia-Pacific.
Domestic demand is expected to further erode through Q4 as players closely manage inventories. Group III prices remain firm against high logistics costs and ongoing strong demand for 4cSt.
Eashani Chavda, Markets Editor
Asia Group I SN150 prices slipped on lower transactions, while that of SN500 and brightstock held largely steady amid thin talks in November. Indian SN150 and SN500 prices continues downwards. Limited spot availability from southeast Asia due to ongoing turnarounds at a couple of Thai refiners’ units was offset by suppressed demand.
Group II prices for light grade 150N and heavy grade 500/600N were flat across the board in subdued trade. Overall demand remained soft, with China import demand seemingly having hit a plateau after relatively strong recovery in the past weeks.
Group III prices were maintained on rangebound deals and offers of November South Korea-origin material.
Middle East Group I SN500 spot prices in the UAE emerged weaker in early November, tracking deals and buy-sell indications for Iranian product. Improved availability of SN500 from Iran also led to prices falling sharply in the ex-tank markets. Discussions for Iranian SN150, on the other hand, remained thin amid a lack of offers from major suppliers, with ex-tank supplies also remaining limited.
Demand for fresh Group II imports from Asia was weak following ample availability of material both in the ex-tank markets and as stock among blenders. Demand for fresh imports is expected to taper going into December as blenders look to destock ahead of the year end.
Demand for finished lubes in the region and the major export markets of Africa remains flat amid lacklustre economic conditions.
www.icis.com
LUBE MAGAZINE NO.172 DECEMBER 2022
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