11 April 2012 09:27 [Source: ICIS news]
By Quintella Koh
SINGAPORE (ICIS)--Prices of Group I SN150 base oil in the Middle East are poised to hit a 23-week high on the back bids heard from distributors and traders early this week, market participants said on Wednesday.
A tender issued by a producer late last week for 4,000 tonnes of Group I SN15, scheduled to be loaded from 20 April to 5 May from Imam Khomeini Port in Iran, has received three bids and this will push prices of the material higher, they said.
The producer had received three bids late on Tuesday at $1,128/tonne (€857/tonne) FOB (free on board) ?xml:namespace>
The tender is likely to be awarded at $1,128/tonne FOB
Factoring in spot freight rates of around $25/tonne, the prices of Group I SN150 base oil prices will stand at $1,153/tonne CFR UAE.
Group I SN150 base oil prices last breached the $1,150/tonne CFR UAE level on 3 November last year.
“Prices are skyrocketing as there is a shortage of SN150 spot cargoes in the
“You have to pay if you need the cargo, as there are no other cheaper alternative sources,” the trader added.
Traders and end-users typically turn to Group I SN150 cargoes from the Black Sea and Baltic Sea regions when spot supply in the
However, they have been unable to import Group I SN150 cargoes from these regions in the past few months as the FOB Black Sea and FOB Baltic Sea quotes are priced at above FOB
Group I SN150 FOB Black Sea and Baltic Sea quotes were assessed at $1,210-1,240/tonne and $1,210-1,235/tonne respectively on 10 April, according to ICIS pricing data.
This compares with Group I SN150 prices that were assessed at $1,105/tonne CFR UAE on 5 April, according to ICIS pricing data.
Meanwhile, blenders in the Middle East said they expect demand from the downstream lubricant sector to remain healthy in the second quarter of this year.
However, demand is expected to start slowing in July as the Middle East region prepares for the Muslim fasting month of Ramadan, which will start on 20 July.
($1 = €0.76)
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