US naphthenic base oils increase on crude surge

12 March 2008 19:09  [Source: ICIS news]

HOUSTON (ICIS news)--Buyers of US naphthenic base oils have accepted a range of recent price increases with little resistance amid rising crude oil values, market sources said on Wednesday.

Sellers announced increases, with effective dates from 27 February to 11 March, following a 40% surge in crude oil values since November.

Calumet lifted prices for all pale oils by 20 cents/gal, except viscosities 500-750, which were increased by 15 cents/gal (€.03/litre), the company said.

NYNAS told its customers it would lift prices for low viscosity oils (100 grade and lower) by 20 cents/gal; mid-viscosity oils (up to 1200 grade) by 15 cents/gal; and its high viscosity oils (over 1200 grade) by 20 cents/gal effective on 3 March. NYNAS also said it would raise prices for technical white oils by 35 cents/gal.

Cross said it increased the price on all grades by 17 cents/gal on 10 March.

Ergon said it lifted prices by 20 cents/gal on the viscosities 60 to 300 and 1,200-2,000. It also lifted prices by 15 cents/gal for viscosities 500 and 750.

San Joaquin Refining said it announced a price hike of 15 cents/gal effective 27 February.

High energy prices were also affecting transportation costs. NYNAS said it would add a 2 cents/gal charge to rail shipments and a 2-7 cents/gal charge on truck shipments.

Buyers said the hikes were accepted for the most part.

Spot prices for 60 grade increased by 15 cents/gal to $3.40-3.61/gal, according to global chemical market intelligence service ICIS pricing.

The published spot prices are based on standard naphthenic base oils, sold mostly into the lubes market. Specialty naphthenics, such as those sold into adhesives and rubber processing were commanding a premium of 75 cents to $1.00/gal, sellers said.

In some cases, transformer oil segments were also commanding a premium of around 50 cents/gal to standard spot prices on the 60 viscosity, a seller said.

Demand has been strong, sellers said, and looks to increase over the next few years.

Growth in the naphthenic segment is being driven by stronger demand for transformer oils for the electricity industry, increased use due to a solvency shift on paraffinic base oils, and as a replacement for paraffinic bright stock in marine engine oils, a producer said.

($1 = €0.65)

By: Heather McGuire Doyle
+1 713 525 2653

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