15 February 2013 09:50 [Source: ICB]
It has not been an easy time for base oil producers. Most markets around the world have seen a sustained period of sluggish demand, and new plants in the Middle East and Asia have injected extra capacity into the market. The inevitable result has been a slide in pricing from mid-2011.
At the start of 2013, the outlook does not look much better, with considerable uncertainty in the market, caused by the ongoing economic slowdown and softness in core end-use markets, such as automotive.
In Europe, the outlook is for continuing price softness, as sellers compete for the scant business on offer. Buyers are not expecting a strong pick-up in the first quarter of the year, or thereafter. One producer said: "2013 will not be a happy year for base oils."
In North America, the situation is similar. By mid-January, producers were adjusting selling prices downwards as a result of global oversupply and slow demand in Asia and Europe.
This is leading to pressure on US markets from export material from these regions.
In the Middle East, the base oils outlook is mixed, as sellers are targeting higher prices in tandem with firmer crude oil pricing. However, buying sentiment remains bearish at the turn of the year as domestic inventories in key export markets are sufficient.
In Asia, 2013 started on a reasonably firm note as buyers were active ahead of the Lunar New Year, especially those in China. Base oil prices have been rising since the start of the year, but the fillip is not anticipated to last. A return to softer conditions is expected to take place after the festivities in early February. One exception has been Singapore, where prices were steady in January as poor demand hit sentiment.
In the longer term, it is unclear where any improvement will come from during 2013. Several new capacities are scheduled and economic recovery is far from certain. Asian and US automotive demand growth seem to be the only bright spots in the picture.
ICIS BASE OILS & LUBRICANTS EVENTS 2013
ICIS is holding its regular series of global base oils and lubricants events in 2013. Confirmed meetings for this year are as follows:
26-27 June 2013, Singapore
8-9 October 2013, Dubai, UAE
6-7 November 2013, Cape Town, South Africa
5-6 December 2013, New Jersey, US
For information about these ICIS Base Oils & Lubricants conferences, please contact: email@example.com
ICIS is also holding a series of base oil training events in 2013, with sessions in London, UK; Miami, Houston and New Jersey in the US; Singapore; and Dubai. For more details contact firstname.lastname@example.org.
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