26 June 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--European Group I domestic base oil prices have fallen $35/tonne (€28/tonne) this week because of lower upstream costs and poor demand, market sources said on Tuesday.
A northwest European distributor recently lowered its Group I prices by €15/tonne because of factors including weaker feedstock costs.
A northwest European supplier expects to announce a price decline of between $30-50/tonne on all Group I grades, as of 1 July.
Demand is subdued, no product is really moving, and the prices in Europe are high compared to other regions, the supplier said.
Moreover, lower vacuum gasoil (VGO) prices mean base oils prices can be reduced without jeopardising refinery margins, it added.
Other suppliers were already selling at lower prices.
“It has got to come down,” said a northwest European buyer.
“I am expecting a large decrease for July.”
Solvent neutral (SN)150 domestic prices were assessed down $35/tonne to $1,350-1,380/tonne FOB (free on board) northwest Europe (NWE) by ICIS.
SN500 prices were assessed down $35/tonne to $1,370-1,400/tonne FOB NWE.
($1 = €0.80)
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