Base Oil Report
Group I Base oil prices in both the European domestic and export markets were stable over July and August in reflection of quiet and subdued activity, as is typical during the summer months.
The export market was particularly subdued. Few arbitrage opportunities existed with those regions that have shown good demand, such as India, having access to lower-priced material from places such as Iran. European exporters saw minimal workable outlets with the exception of Africa, and demand from there was reduced by ongoing financing restrictions in the key Nigerian market. Sizable tenders from Venezuela were supplied from the US and so had little impact on the European balance.
However, such low demand did not impact on European export prices. Availability of the solvent neutral grades was fairly tight as a result of refiners producing enough for their domestic customers with the result that little was left for exports. In a reversal of recent trends, brightstock availability has become high and, although no discounts have yet been seen, prices have moved towards the lower half of the assessed range.
The European price stability was in stark contrast to developments in the Baltic export market, where vastly divergent market views saw price ranges widen and fluctuate, although towards the end of August the trend was upwards.
This upward movement could eventually lead to higher prices in Europe and Baltic imports constitute an ever-larger proportion of domestic sales in Europe. Some resellers of Baltic material in Europe had already increased their prices during the summer, however good availability from central European refiners was preventing prices from moving higher than the existing ranges.
Group III supplies in Europe are increasingly long, with material from the Abu Dhabi National Oil Company’s new 500,000 tonne/year plant (currently operating at half capacity) being made available for import (although the bulk of the plant’s output is being marketed in Asia Pacific) in addition to low-priced Russian Group III. Prices of OEM-approved (original equipment manufacturer) material have so far resisted the pressures of an oversupplied market, partly because consumers’ tanks are so full they have no room to take extra, low-priced alternatives.
Ross Yeo Senior Editor Manager (Europe) ICIS
LINK
www.icis.com
29th 6th
– 9th
ELGI AGM May 2017
Hilton Kalastajatorppa, Helsinki, Finland
Future Developments in Lubricating Grease
Innovation
ELGI, Hemonylaan 26, 1074 BJ Amsterdam, Netherlands Telephone: +31 20 67 16 162
• Alternative Thickeners • Dosing and Application Systems • Fill for Life Lubrication • Innovative Grease Packaging
• Laboratory Test Methods better reflecting the Application
• Minimum Quantity Lubrication • New Additives and Base Oils • Noise Damping Greases • “Product plus Service” Concepts
Email:
carol@elgi.demon.nl
Online:
www.elgi.org
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