19 March 2013 17:27 [Source: ICIS news]
LONDON (ICIS)--Deals to send base oil cargoes from the Baltic Sea to West Africa have dwindled in recent weeks, with buyers’ and sellers’ pricing ideas being simply too far apart, traders said on Tuesday.
Numerous cargoes are believed to have arrived in Nigeria during February, meaning that current demand is not high. While traders have requests for material, the prices being suggested are not deemed realistic.
Simultaneously, producers supplying the Baltic region have continued to steadily increase their offer prices since late January, in an effort bolster narrow profit margins.
The current gap between bids and offers for SN900, a popular grade in West Africa, is at least $90/tonne (€69/tonne), according to most traders.
Many producers are believed to be operating their plants at reduced rates, and so are under no pressure to lower prices and shift stock. As such, traders feel it is the buyers who be forced to eventually increase their price ideas.
West Africa, and in particular Nigeria, is traditionally a significant buying region for Baltic Sea base oils, which tend to be lower in both quality and price compared to western European material.
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