12 February 2013 17:11 [Source: ICIS news]
LONDON (ICIS)--Base oil prices in the Baltic Sea market have firmed this week as buyers’ price ideas begin to catch up with sellers’ offers, traders said on Tuesday.
For much of 2013 so far, producers have been trying to increase prices in the market, following a sustained period of minimal profit margins on the back of price decreases that began at the start of the fourth quarter of 2012.
However, they have been hampered in these efforts by poor demand for exports, leading many producers to resort to reducing plant operation rates, and to concentrate on selling more profitable alternatives, such as diesel, instead.
These run cuts have now begun to tighten the market and, with rising crude oil prices, there is ever-greater upward pressure on prices.
This week, traders noted an uptick in enquiries from buyers in key importing regions, including west Africa and the Middle East, and there is a widespread sense that this demand could facilitate significant price increases.
“There is demand. Its growing gradually, it’s not a huge jump, but it’s getting there,” said one trader.
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