China's Jingmen Petchem to delay base oil plant restart to August

23 May 2012 11:34  [Source: ICIS news]

SINGAPORE (ICIS)--China’s Jingmen Petrochemical plans to delay the restart of its 100,000 tonne/year Group II base oil plant in Hubei province by about three months to August because of bearish domestic conditions, a company source said on Wednesday.

The facility, which shut for maintenance on 26 March, was originally due to resume production this month, the source said.

Domestic prices of Group II base oils in China have been falling this month because of ample supply and weak consumer demand.

Distributors said they are trying to reduce their inventories as they expect prices to fall further in June, when the seasonal lull for downstream lubricant sector commences.

Domestic supply, they added, is expected to rise in June as several base oil plants will complete their maintenance shutdowns by the end of this month.  

Diesel prices – which are a component in the base oil pricing formula of some refiners in China – are expected to drop next month if crude prices remain weak, said blenders.

“The sentiment is very bearish because of the lower crude, poor demand and high inventories. We expect the Chinese refiners to lower prices next month and we want to sell as much as we can before that happens,” a distributor said.

Jingmen – a unit of Sinopec – restarted its second 200,000 tonne/year Group I line on 15 May after about seven weeks of maintenance, the company source said.


By: Yeow Pei Lin



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