28 January 2013 09:15 [Source: ICIS news]
SINGAPORE (ICIS)--Group I base oil prices in Asia have been rising since the start of the year, as Chinese buyers are rushing to secure cargoes amid increasing freight because of tight vessel availability, market sources said on Monday.
Prices across all grades of Group I base oils have gained $10-40/tonne (€7-30/tonne) from the start of the year, with SN150 at $910-940/tonne CFR (cost and freight) NE (northeast) Asia; SN500 at $980-1,030/tonne CFR NE Asia, and brightstock at $1,080-1,130/tonne CFR NE Asia on 289 January, they said.
Demand for second-half February and early March cargoes coming from China and Taiwan is strong in the weeks leading to the week-long Lunar New Year holiday.
“Market participants are trying to ship out cargoes before the Chinese market closes for a week, a China-based buyer said.
The Chinese markets will be closed on 9-15 February for the festivity.
“The ports will be closed and there will unlikely to be any trading activities during the first two weeks of February or the last two weeks of February, as many market participants are away during the holidays,” he said.
Freight costs have been going up for the past two weeks in view of the strong demand for base oils, against a limited number of ships available to make the delivery, market sources said.
“Southeast Asia-to-northeast Asia routes, and intra-northeast Asia routes – from South Korea to China and to Taiwan – are seeing very tight vessel spaces and freights have increased by $10-20/tonne [from December 2012] as a result,” a Singapore-based shipping broker said.
For base oil parcels of 3,000-5,000 tonnes, the current shipping rates from Thailand to China were about $70-80/tonne, and those from South Korea to China were at $40-50/tonne, he said.
($1 = €0.74)
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