INSIGHT
Eashani Chavda, Markets Editor
Base Oil Report
Europe European domestic Group I and II base oils spot prices were flat in the first half of July due to stable supply and demand fundamentals. Whereas Group III prices fell further as imports into the region continued to exert downwards pressure on the market. European export values slipped slightly with players seeing some softening amid continuously weak market fundamentals. ENI’s Livorno, Italy plant remains in shutdown following an extension of a planned maintenance. A company source confirmed that the plant will not be producing during July.
US
Supplies are sufficient to meet contractual obligations in the US market, but some Group II refiners have limited spot availability. Demand is weak enough that it has been a non-issue for consumers. Weak demand for base oil is driven by efforts downstream to reduce inventory levels, which has been occurring all year. Group III prices declined as new, lower July price levels took effect early in the month.
Asia
Asian base oils Group I average prices for all grades extended losses, tracking the continued decline in Group II prices. Deals and discussions of southeast Asia-origin cargoes were thin, with relatively shorter supply being met with tepid demand. In India, Groups I and II import prices mostly dropped on softer demand in the middle of the monsoon season. Buying interest for imported material was curbed due to stiff competition with comparatively lower priced domestic cargoes. Meanwhile, Group III average prices of 4cSt and 6cSt slipped on lower July offers to China from a major refiner in South Korea. Buying sentiment for cargoes from South Korea softened due to the availability of lower-priced material from southeast Asia and the Middle East.
Middle East
Spot base oil prices in the UAE were mixed in mid-July. Spot Iranian Group I import discussions were limited, as buyers largely waited for fresh offers to emerge after the Eid ul-Adha holidays. Ex-tank prices for SN500 cargoes edged up and this was attributed to a cutback in local availability. Whether this uptrend is sustained in the short term remains to be seen, as downstream demand remains largely lukewarm amid a widespread sluggishness in finished lube exports to African markets. Furthermore, players looked to receive incoming material from Iran, which is expected to arrive into the local markets in the second half of July.
www.icis.com
LUBE MAGAZINE NO.176 AUGUST 2023
61
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