Problems at Shell’s Stanlow refinery tighten UK base oils market

02 June 2010 12:03  [Source: ICIS news]

LONDON (ICIS news)--Unspecified problems with the production of base oils at Shell’s refinery at Stanlow, UK, have left customers scrambling to find alternative supplies in an already tight market, sources said on Wednesday.

According to a company source, there have been “a few problems” at the refinery that have lasted “for a few days”.

Shell would not officially comment on the extent or expected duration of the production problems.

“We can’t seem to get anything out of Stanlow,” said a UK-based lubricants blender, referring to base oils.

The Stanlow refinery has the capacity to produce 260,000 tonnes/year of Group I base oils.

A base oils trader and distributor said: “We have loads of UK customers looking for product. Numbers are pushing up for this month.”

The European market for base oils has tightened since the first quarter, partly because producers were exporting material to regions where prices were higher.

European domestic prices for solvent-neutral 150 base oils rose from $810-835/tonne (€664-685/tonne) FOB (free on board) NWE (northwest Europe) in March to $940-980/tonne FOB NWE on 1 June, according to global chemical market intelligence service ICIS pricing.

Producers are seeking further price increases for June deliveries to European customers.

Shell is understood to be negotiating the sale of the entire Stanlow site as part of a plan to rationalise its European refining operations.

($1 = €0.82)

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By: James Mills
+44 208 652 3214

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