29 January 2013 08:13 [Source: ICIS news]
SINGAPORE (ICIS)--China’s Shandong Qisheng Industry & Trade has delayed the restart of its 70,000 tonne/year Group I base oils plant at Zibo in Shandong province by around one month to late February, a company source said on Tuesday.
The company shut the plant in late December 2012 for maintenance and it had originally planned to restart the unit in late January, the source said.
However, the company decided to postpone the restart as high production costs on the back of high feedstock costs will result in negative margins, the source explained, adding that they will try to settle feedstock prices with upstream suppliers during the shutdown.
China’s Group I base oils supply is expected to tighten in the first quarter, as many small and medium-sized producers chose to suspend production in view of zero or negative margins, industry sources said.
Therefore, prices are expected to firm in China this quarter, added the sources.
Group I base oils were traded at yuan (CNY) 8,250-9,000/tonne ($1,324-1,445/tonne) on 29 January in north and northeast China, traders said.
($1 = CNY6.23)
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