PetroChina, Sinopec to boost spot base oils supply in January

08 December 2010 11:00  [Source: ICIS news]

By Nancy Shi

SINGAPORE (ICIS)--China’s giant refiners Sinopec and PetroChina are expected to normalise supply of base oils in the spot market in January, after keeping volumes quite low in recent months, industry sources said on Wednesday.

Around 20,000 tonnes of spot cargoes would be made available by the two companies next month, more than three times the volume this month, sources said.

Chinese refiners had cut their base oils output since October to produce more diesel, which was in short supply amid strong demand.

Sinopec and PetroChina had limited the supply to the market even though they exceeded their annual base oils production this year, market sources said.

The extra volumes would be made available next year, they said.

In December, Sinopec and PetroChina would just release 3,000 tonnes of base oils supply each, with the tight availability likely fuelling further spikes in prices, market sources said.

Prices of most base oils grades surged by CNY50-400/tonne ($8-60/tonne) from 30 November to 7 December, according to China energy market intelligence service C1 Energy.

The firm is a wholly owned subsidiary of CBI China, in which ICIS is in the process of raising its stake.

SN150 base oils from Maoming Petrochemical Co were priced at CNY9,700–9,900/tonne this week, while SN400 grade was quoted at CNY9,800–10,000/tonne, market sources said.

($1 = CNY6.65)

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