19 February 2013 07:42 [Source: ICIS news]
SINGAPORE (ICIS)--Asia’s Group I base oil export prices have remained stable after the Lunar New Year holiday because of flat demand, although most buyers had returned to the market, market sources said.
Traditionally, buyers in China and southeast Asia secure the following month’s cargoes right after the Lunar New Year holiday and the spurt in buying activity often gives support to price increases. However, this is not the case this year, a Singapore-based trader said.
Buyers continue to remain on the sidelines as they are uncertain if prices will fall on the prevailing weak demand, or rise as regional refineries cut production amid high feedstock costs and low base oil price realisations, the trader added.
No buyer was heard to be actively seeking cargoes, a second trader added.
Meanwhile, price hikes of $10-20/tonne (€8-15/tonne) across all grades of base oils by sellers were largely resisted by potential buyers, who reiterated that downstream lubricant sales were slow-moving, the second trader noted.
However, traders pointed out that several Group I refineries in the region have limited spot cargoes in March, as spot prices were not as attractive as term contract prices. Most refiners would prefer to cut production as feedstock costs were high, and service term contracts until a clearer price direction emerges in the next few weeks.
The FOB (free on board) Asia prices of SN150, SN500 and brightstock were assessed on 19 February at $840-870/tonne, $910-960/tonne and $1,010-1,060/tonne respectively, unchanged from the previous week, according to ICIS data.
($1 = €0.75)
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