Europe base oil export prices fall on rising supply, weak demand

23 August 2011 23:59  [Source: ICIS news]

LONDON (ICIS)--European base oil solvent neutral (SN)150 and SN500 export prices have fallen $50/tonne (€35/tonne) this week because of rising supply and sluggish demand, markets sources said on Tuesday.

In order to move product in a slow market, European suppliers are indicating lower prices.

For several weeks, buyers and traders expected prices to come down, citing slow offtake, a lack of arbitrage opportunities and price declines upstream.

However, producers held prices up at prevailing levels.

As August draws to a close, supply and demand has proved to be decisive as faced with mounting stocks and low buying interest, supplier resistance has ended.

“We are one of the people offering lower,” said a northwest European producer. “We have seen a slower domestic market in July and August.”

The producer dropped its price by $80/tonne in one case, to secure export business. “Supply and demand is the main thing.” the producer added.

Another producer confirmed it would accept a reduction of $35-50/tonne on its existing SN150 and SN500 price in order to move some product.

In the week ending 23 August, ICIS assessed SN150 and SN500 FOB (free on board) Europe export prices down $50/tonne to $1,350-1,390/tonne and $1370-1,400/tonne FOB respectively.

Sources were unclear how long this downtrend would last or how far prices would need to fall to generate better demand.

($1 = €0.70)

For more on urea visit ICIS pricing fertilizers

By: Carl Roache
+44 20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly