Base Oil Report


As with most refinery products, the base oil market experienced huge prices losses throughout the fourth quarter of 2014, and further decreases appear likely in the opening stages of 2015.


The primary reason for this downturn is of course the well documented collapse in crude oil prices. With all refinery products showing corresponding price falls, vacuum gasoil and base oils have been no different.


Buyers have been acutely aware of the substantial decreases to feedstock prices and expect to see immediate reflections in base oil prices.


The effect on European refiners has been mixed. Some, particularly those located inland that face higher transportation costs (and therefore narrower margins) and also longer lead times, have struggled. As buyers expect crude oil price decreases to be reflected in real time, refiners are being forced to discount base oils that were produced from crude oil purchased earlier, at higher prices.


Yet other refineries appear to be more comfortable, and many have spoken of the


need to further price reductions to quickly establish a new norm that corresponds with current feedstock levels. Many refiners are running flat-out, taking advantage of the low feedstock costs and also the fact the base oil prices have not decreased proportionally by as much as some of other products, such as naphtha.


As well as upstream weakness, the base oil market has also been negatively affected by underwhelming demand, linked to the struggling European economy. Early-2015 demand has been encouraging, but it remains to be seen if this persists beyond a brief restocking period, and whether lower prices will help; automotive lubricant demand is not price-driven.


The European Group I base oil industry has also begun to suffer from competition with Group II and Group III material, particularly the former. Group II imports from Chevron’s Pascagoula, Mississippi, plant have been available at competitive prices and, in an oversupplied European marketplace, it is Group I that is always going to lose out.


The aforementioned high operating rates at a time of low demand and competition


with higher quality material has seen some very large


discounts given, and repeated, for Group I cargoes in the export


markets. Buyers in key export destinations appear even more price savvy and are determined never to pay over the odds, often delayed deals as upstream costs slide further. Here, too, competition with Group II is fierce.


As had been long expected, competition with other base oil Groups have led to the announced closures of a number of European Group I refineries. However, such is weak outlook for Group I that these moves are expected to balance the market at best, rather than tighten supplies and increase prices.


Ross Yeo Senior Editor Manager (Europe) ICIS


LINK www.icis.com


Requirements Include:


• PhD in Chemistry with more than five years’ experience or Bachelor in Chemistry with more


Career Alchemy Happens at Huntsman


Discover your career destination at Huntsman Corporation, a global chemical company with a diverse portfolio of innovative ideas and products. Through continuous product developments and advancements, we change lives and transform a variety of industries. There’s really no end to the markets we serve with our ingenuity and teamwork.


Join Huntsman as an Application Scientist in Metal Working


As an Application Scientist, working out of Huntsman’s Everberg Belgium site, you will support the Processing Chemicals Strategic Business Units’ effort with specific responsibility for Europe Middle East and Africa (EMEA) and global coordination of the technical activities.


than ten years’ experience.


• Willing to travel up to 30% in the EMEA region and abroad.


• Effective communication skills and excellent knowledge of English.


• Knowledge and application of experimental design techniques.


• Proven record in scaling processes up from bench to industrial scale.


• Application experience of the formulation and evaluation of components in metalworking and/or industrial lubricants.


• Good knowledge of organic chemistry and structure activity relationship in a specific


functional area.


We want to improve millions of lives and you can join us in making a difference. Start your Huntsman journey here. Visit our website and search for career opportunities to find your destination. www.huntsman.com


Choose a career at Huntsman. Equal Opportunity Employer


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53