Asia base oil supplies impacting European Group I export prices

08 October 2012 11:28  [Source: ICIS news]

DUBAI (ICIS)--European Group I base oil export prices are expected to hold steady in the short term as competitively-priced Asian supplies limit any upward movement, a trader said on Monday.

Speaking on the sidelines ahead of the ICIS Middle East Base Oils and Lubricants Conference in Dubai, the trader said that Asian base oils were providing an alternative in various markets, which limited the upward potential of European export prices, despite European producers’ margins being squeezed.

As a result, some European producers may opt to cut base oil production rates.

“I think prices will stay stable-ish and then they [European producers] will cut runs,” it said.

Uncertain global base oil demand was also impacting European prices.

The trader said movement is improving in the Middle East and Turkey is fairly active, but that the global base oil demand picture remains tentative.

A different trader said: “The overall global demand picture is why we are where we are.”

European solvent neutral (SN)150 and SN500 export prices were assessed stable last week by ICIS at $1,025-1,050/tonne (€789-809/tonne) FOB (free on board) Europe and $1,040-1,060/tonne FOB respectively.

($1 = €0.77)

By: Carl Roache
+44 20 8652 3214

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