CNOOC adjusts discount scheme on base oils to attract big orders

08 March 2013 07:52  [Source: ICIS news]

SINGAPORE (ICIS)--China National Offshore Oil Corp (CNOOC) has adjusted its discount scheme for base oils sales in an attempt to further attract big orders from key buyers, particularly lubricant producers, traders said on Friday.

Effective on 1 March, the company is giving stepped discounts to buyers based on their volumes, and at the same time, the discounts vary for traders and end-users.

The new scheme only applies to N150 and N60 products.

Previously, the company did not use stepped discounts and treated traders and end-users equally.   

Under the new scheme (see table below), end-users will be in a favorable position against traders when buying N150 product because they enjoy higher discounts than the latter.  

Some small and medium-sized traders may see their margins squeezed, resulting in a smaller market shares, traders said.

These traders may operate in group-buying in order to obtain the maximum discounts or even stop trading CNOOC products, they said.

CNOOC is the third biggest base oil producer in China after Sinopec and PetroChina, with a capacity of 400,000 tonnes/year at Huizhou in Guangdong.

Discounts

 

A

B

C

D

N150

below 200 tonnes

200-600 tonnes

600-1,500 tonnes

above 1,500 tonnes

Traders

0.8%

1.5%

3%

4%

End-users

1.5%

3%

4%

N/A

N60

below 200 tonnes

200-500 tonnes

500-1,000 tonnes

above 1,000 tonnes

All buyers

0.8%

1.5%

3%

4%

Note: the orders are monthly volumes


By: Whitney Shi
+65 6780 4359



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