23 March 2010 20:03 [Source: ICIS news]
HOUSTON (ICIS news)--Two US naphthenic base oil sellers have issued hikes of 15 cents/gal ($45/tonne or €33/tonne), with others seriously considering increases as well, sources said on Tuesday.
San Joaquin Refining (SJR) will raise all grades of naphthenic base oils by 15 cents/gal, effective on 30 March.
The announcement follows a similar move by Cross last week. Cross told buyers it would raise its heavy grades of base oils, 1200 viscosity and above, by 15 cents/gal, effective on Monday.
Pale 2000 has been trading on the spot market for $2.57-2.78/gal FOB (free on board), according to data from global chemical market intelligence service ICIS pricing.
Naphthenic base oil sellers had not issued any major hikes since the end of 2009, but there have been at least two paraffinic base oil hikes in 2010.
A seller said the hikes are necessary since crude oil has surged and is eating into margins.
Another seller said that demand has not picked up enough for all grades to warrant an increase yet, but added that margins were getting squeezed by the rising cost of crude oil.
Other naphthenic base oil suppliers, including Ergon, Calumet and Nynas, have not announced a hike.
Heavy grades of naphthenic base oils such as Pale 2000 were snug, players said, but the light grades were still in oversupply.
“The plants are all running now after the turnarounds, and there is a lot of light viscosity product out there,” a buyer said. “It is pretty sloppy.”
San Joaquin Refining (SJR), Cross and Calumet had been in planned turnarounds during the first quarter. All had returned on line and were ramping up operating rates, including Calumet’s plant in Houston.
Houston Refining’s 3,600 bbl/day naphthenic base oil plant was now back up and running, Calumet said, after going down in mid January for a planned turnaround.
($1 = €0.74)
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