12 October 2012 08:55 [Source: ICIS news]
SINGAPORE (ICIS)--China’s largest oil refiner, Sinopec, plans to supply about 8,000 tonnes of Group I base oils to the domestic market in October, down by almost 17% from a month ago, a company source said on Friday.
The company has decided to reduce its commercial supply in order to increase volumes for captive use, as it wants to boost lubricant sales in the fourth quarter, the source said.
Most of the supply will be produced by its subsidiaries – Jingmen Petrochemical, Nanyang Petrochemical and Yanshan Petrochemical – which have Group I base oil plant capacities of 250,000 tonnes/year, 50,000 tonnes/year and 260,000 tonnes/year respectively, the source added.
Downstream demand from China’s lubricant plants is weak following the week-long national day holiday that ended on 7 October, said some sources from Sinopec’s trading arms.
As a result, Nanyang Petrochemical and Jingmen Petrochemical cut their ex-works prices by about yuan (CNY) 300/tonne ($48/tonne) from two weeks ago to CNY8,450/tonne and CNY8,800/tonne respectively on 8 October, the sources added.
Group I base oils were traded at CNY8,450-8,950/tonne in China on 12 October, down by CNY100-300/tonne from two weeks earlier, traders said.
Sinopec sold about 9,600 tonnes of Group I base oils in September.
($1 = CNY6.28)
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