17 February 2011 05:23 [Source: ICIS news]
SHANGHAI (ICIS)--Chinese major producers PetroChina and Sinopec have suspended spot base oils sales to the domestic market in February because of tight supply, sources from the two giants said on Thursday.
PetroChina could only supply to its own downstream lubricant plants because the 150,000 tonne/year Group I plant run by the group's major refinery in Fushun was still under maintenance.
The Fushun refinery turnaround started in October 2010 and the company planned to restart it towards the end of March.
Dalian Petrochemical, a PetroChina subsidiary, had exported more than 5,000 tonnes of base oils to the international market this month to fulfill its term commitments, said a company source said.
Meanwhile, Sinopec subsidiary Gaoqiao Petrochemical still needed to build inventory at its 700,000 tonne/year base oils unit after the refinery was restarted early this month, said a Sinopec source.
Sinopec suspended all base oil sales in February as it was saving stocking up for its own requirements in the March-April peak season for lubricants, the source said. This was the first time in nearly six months that Sinopec did not offer spot base oils supply, he added.
China's domestic base oils supply remained tight and prices had been rising after the Lunar New Year holidays on 2-8 February, traders said.
Chinese local Group I base oils prices were at yuan (CNY) 10,000-11,200/tonne ($1,515-1,697/tonne) this week, up CNY300-700/tonne compared with the pre-holiday weekly assessment by C1 Energy, an ICIS service in China.
Some domestic buyers said they started purchasing imported cargoes instead as they needed to build up their stocks before the peak demand season. This was lending support to Asian import prices, which increased by an average $5-80/tonne (€4-59/tonne) this week across all base oil grades, according to C1 Energy.
PetroChina and Sinopec are the biggest producers of base oils in China, producing nearly 60% of the country’s total, according to C1 Energy.
($1 = CNY6.6, $1 = €0.74)
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