27 May 2008 09:14 [Source: ICIS news]
Spot offers for Group I and II solvent neutrals/neutral grades have spiked to $1,200-1,300/tonne FOB (free on board)
Woefully tight supply had exacerbated the pricing situation, said regional traders.
“There is no additional base oil volume in the market and [it is] difficult to secure cargoes despite high prices,” said a southeast Asian trader.
Gasoil prices have been so high that many of the Asian base oil producers have cut base oil production to maximise fuels output, said a regional base oil maker.
Gasoil prices were hovering at $1,280/tonne ($170/bbl) and base oil producers were targeting similar numbers for base oils.
Demand has held up well until now in the face of surging prices, said buyers and sellers.
Big buyers like
Downstream lubricant makers are reeling due to disappearing margins, and many of the non-integrated small-to-medium sized blenders may soon be forced to shut shop, said a Taiwanese blender.
Only the integrated refinery and lube makers may survive these high costs, he added.
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