29 January 2013 03:09 [Source: ICIS news]
SINGAPORE (ICIS)--February Group II import prices in India have risen amid tighter Asian spot availabilities as two key South Korean refiners prepare for their month-long maintenance shutdown in March, market sources said.
Both GS Caltex and S-Oil will be shutting their 1.3m tonne/year Group II and III plant and 500,000 tonnes/year Group II and III plant, respectively, for a turnaround in early March for 30-40 days.
South Korean refiners such as GS Caltex, S-Oil and SK Lubricants are traditional suppliers of spot Group II base oils to the Indian market, although S-Oil does supply some term volume to Indian buyers.
Taiwan’s Formosa Petrochemical Corp (FPCC), another key northeast Asian refiner, supplies only term cargoes to the Indian market as the bulk of its term and spot volume is allocated to the Chinese market.
“S-Oil has not started offering any spot cargoes to the Indian market in February as it is building up inventories ahead of its shutdown,” an Indian buyer said.
“While GS Caltex has offered some spot cargoes, offers have risen by $20-30/tonne from January as the refiner is building up inventories ahead of its planned maintenance shutdown,” a second Indian buyer added.
South Korea and Taiwan are the main suppliers of Group II export cargoes. With both GS Caltex and S-Oil going for their maintenance shutdown, supply in northeast Asia is expected to tighten in the second quarter, market participants said.
Prices of Group II cargoes are expected to continue to rise in the coming weeks, and especially in March and April. Although China has several Group II refineries, these mainly cater to the Chinese domestic market and their outputs are not exported.
Demand for heavier grade 500N and 600N remains firm with prices having risen by $10.00/tonne (€7.40/tonne) since the beginning of the year. Prices of 500N stood at $1,050-1,110/tonne CFR (cost & freight) India on 29 January while prices of 150N were stable at $970-1,020/tonne CFR India.
($1 = €0.74)
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