ICIS World Base Oil Conference London
The 19th ICIS World Base Oils & Lubricants Conference took place on 18-20 February 2015 at the Park Plaza, London, UK. This year’s event was again hugely successful with over 500 attendees representing 279 companies from 51 countries.
Once again, the leaders of our industry gave their perspectives on future market development, the high-level speaker program highlighted how to create and capture value in today’s markets, and how to face difficult trading conditions.
With keynote speakers APU GOSALIA, Head of Global Competitive Intelligence, Chief Sustainability Officer, FUCHS PETROLUB SE delivering a presentation on Macroeconomic factors impacting the Global and European lubricants industry and ROB SHAMA, President, AFTON CHEMICAL sharing his expertise on The impact of the latest automotive regulations on lubricant formulations. The pre- conference seminar devoted an afternoon’s discussion to the growth of synthetic base oils and their varied applications.
To download the post event report and for all other information on the ICIS Base Oils & Lubricants Conferences portfolio please visit:
www.icisbaseoils.com
LINKS
www.icisbaseoils.com
Base Oil Report
After almost two quarters of nearly constant decreases, European Group I base oil prices finally hit the bottom in February, first in the domestic market and then in the export market.
Support was first derived from crude oil prices also reaching the floor and stabilising in the second half of January, and thereafter recovering some ground. There is a time delay between developments in the crude oil and vacuum gasoil markets and those in the base oil market, but this nevertheless alerted the market to the likelihood that the base oil downward trend could soon come to an end.
As well as the time lag between upstream developments and those in the base oil market, it took some time for the market to balance out. Refiners continued to offload product as exports in an effort to reduce excess material in the domestic market, thereby sustaining the pressure on export prices.
In the domestic market, truckload prices
stabilised much earlier than bulk prices because the former are in euros, and so received support from the weakening value of the euro versus the dollar. Such was the extent of the decline in the value of the euro that refiners’ netback in dollar terms decreased substantially even when market prices had not been moved.
In the European export market, prices bottomed out in late February and immediately there were concerted efforts by certain participants to raise prices. However, these efforts soon cooled when it became clear the market required at least a modest period of stability, by which trading could normalise after such a dramatic and sustained period of decline.
Availability in the Baltic market tightened much more quickly than in Europe. However, prices had continued to be pressure by decreases in the European export market. With Baltic material generally of lower quality than northwest European and Mediterranean material, prices in latter market are priced at
premiums to those in the former.
This eventually led to the
situation where Baltic Sea export prices had been depressed by weakness in the European export market to the point that margins with vacuum gasoil were extremely narrow, but, equally, there was very little room to increase because European export prices were only slightly higher. Regional maintenance turnarounds and the approaching commencement of the Russian agricultural season and the associated increase in domestic demand mean the market is likely to tighten further.
Ross Yeo Senior Editor Manager (Europe) ICIS
LINK
www.icis.com
LUBE MAGAZINE NO.126 APRIL 2015
65
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