22 May 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--Black Sea base oil prices have slipped $15/tonne (€12/tonne) this week because of rising supply and poor demand, sources said on Tuesday.
The shift in the Black Sea supply-demand balance has seen declines registered for the first time since January.
Demand has evaporated in the key Turkish market because of tighter government regulation for lubricant blenders and an oversupply of stock domestically.
“Contractural imports are still going but spot business has stopped because they [buyers] are waiting for it to settle down. We have a lot of stock in our hands,” explained a Turkish importer.
“We are all selling at a loss. We are just trying to get rid of our stocks,” added the importer.
This reduced offtake is impacting the Black Sea, with certain ports well-stocked.
In addition, one producer is said to be in the process of restarting, and the three base oils units of Russia’s Lukoil, which supplies out of the Black Sea and Baltic Sea, are all operating at full rates after periods of maintenance, a company source said this week.
The latest one to return was its 345,000 tonne/year plant at Nizhny Novgorod, which finished maintenance last week.
The sluggish demand and rising supply have combined to push Black Sea prices down.
Solvent neutral (SN)150 and SN500 prices were both assessed down by $15/tonne to $1,225-1,255/tonne FOB (free on board) Black Sea by ICIS.
($1 = €0.78)
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