20 March 2013 16:06 [Source: ICIS news]
LONDON (ICIS)--Domestic base oil prices in South Africa are expected to increase in April despite lacklustre demand, sources said on Wednesday.
The majority of South African base oils are distributed via monthly contracts, the prices of which are generally issued by suppliers on a take-it-or-leave-it basis.
Downstream finished lubricant demand so far in 2013 has widely been described as being below expectations, and this has filtered up to the base oil market.
As a result, base oils were oversupplied during the first two months of the year, and this prevented prices from increasing as suppliers sought to shift stock.
Meanwhile, prices in the European export market, from which South Africa imports significant quantities, were steadily increasing.
The oversupply is now generally said to have cleared, and as such independent players expect major suppliers to push through prices increases next month, in line with higher European prices.
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