China’s Shandong Qisheng cuts Oct base oil supply on plant shutdown

11 October 2012 12:43  [Source: ICIS news]

SINGAPORE (ICIS)--China’s Shandong Qisheng Industry & Trade has reduced its supply of Group I base oils to the Chinese market since 10 October, because of an ongoing month-long plant shutdown, a company source said on Thursday.

The Chinese company shut its 70,000 tonne/year Group I base oil plant at Zibo in Shandong province on 10 October, because there was a shortage of feedstock as well, the source explained.

The plant was shut shortly after its Group I base oil plant was restarted in late September.

Shandong Qisheng will continue supplying the Chinese domestic market during the turnaround with its limited stocks, which are lower than its original monthly target of 3,000-4,000 tonnes, the source said.

The supply of on-spec Group I base oils is expected to tighten in the Shandong market in October and early November, market sources said.

However, the shutdown of Shandong Qisheng’s plant will have minimal impact on the Chinese base oil market, as there is currently an oversupply of Group I and II product for October, the sources said.

Shandong Qisheng is offering its Group I N60 at yuan (CNY) 9,100/tonne ($1,444/tonne), while its SN150 and SN350 are offered at CNY8,900/tonne, according to a company source.

Group I base oils in China were traded at CNY8,450-8,800/tonne on 11 October, down by CNY300-600/tonne from two weeks ago, traders said.

($1 = CNY6.30)

By: Whitney Shi
+65 6780 4359

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