28 August 2012 05:13 [Source: ICIS news]
By Andrea Heng
Prices of Group I SN500 were assessed as unchanged at $995-1035/tonne (€796-828/tonne) CFR (cost & freight) UAE in the week ended 23 August amid subdued trade during the Muslim celebration of Eid ul-Fitr – at the conclusion of the fasting month of Ramadan- which started on 19 August.
However, market sentiment is expected to turn bullish when SN500 base oil availability tightens as expected in the near term.
“SN500 import supply has been short for the last 2-3 months, especially from major Iranian producers like Iranol Oil and Sepahan Oil Company (SOC),” a trader said.
List prices from SOC were unchanged at $1,080/tonne CFR UAE during the week ended 16 August as there was no update from the Iranian major for the week ended 23 August amid the Eid ul-Fitr holidays.
“Iranian producers don’t want to lower their SN500 prices because they have observed the shortage in supply. One of them previously had higher availability of other viscosities of Group I base oils, such as SN150 and SN600, compared to the SN500,” a second trader said.
“Likewise, the buyers in the UAE acknowledge that the prices have bottomed out and will rise in the near term,” the trader added.
A third trader said: “While there is some supply from Europe and
In addition to the costly Europe-origin cargoes, logistic issues have risen for Russian SN500 parcels to the UAE, causing interest for these alternative sources to weaken, the trader added.
In the local market, prices of Group I SN500 base oils were assessed as down by $20/tonne ex-tank Sharjah to $1,020-1,055/tonne ex-tank Sharjah week on week on the back of softer discussions amid subdued trade during Eid ul-Fitr holidays.
“These prices are bound to rise in the near term as well, when imports to the UAE become costly for traders. Some still have Group I cargoes, but mostly of the other viscosities,” the first trader said.
($1 = €0.80)
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