25 March 2013 06:12 [Source: ICIS news]
SINGAPORE (ICIS)--Prices of base oils have declined in China because of weak market sentiment as the country is expected to reduce the retail prices of gasoline and gasoil on 27 March, major traders said on Monday.
Domestic sales of base oils have dampened, with expectations that China is likely to reduce the retail prices of gasoline and gasoil in line with the recent fall in international crude prices, the traders explained.
Several major lubricant producers have halted their purchasing activity as they expect further price cuts, the traders added.
Group I base oils in China were traded at yuan (CNY) 8,500-9,400/tonne ($1,369-1,514/tonne) in the week ended 22 March, down by CNY50-150/tonne week on week, according to the price assessments by ICIS C1 Energy.
Trade of Group II base oil grades was CNY100/tonne lower at CNY8,850-10,300/tonne over the same period, ICIS C1 Energy price assessment showed.
However, Chinese base oil prices are expected to rebound in April in response to tightening market fundamentals, the traders said.
Chinese base oil producers have shut several units for maintenance and some have reduced their production output, according to the traders.
This will have an impact on supply, as downstream demand is typically robust during the peak consumption period of March-May, the traders said.
($1 = CNY6.21)
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