Turkish base oil demand there but buyers hope for lower prices

16 July 2013 16:47  [Source: ICIS news]

LONDON (ICIS)--Demand for base oils in the Black Sea is steady, particularly to the Turkish market, but if prices were to come down more business could be done, sources said on Tuesday.

“We are seeing good demand from Turkey and buyers are making purchases now for delivery at end of Ramadan,” a regional producer said.

Ramadan began on the sunset of 8 July and continues for 30 days until 7 August.

In relation to prices, the producer spoke about a “slight deficit” in the Black Sea and having managed to achieve premiums over the ICIS quotation of $5-10/tonne (€3.85-7.70/tonne).

SN150 and SN500 FOB (free on board) Black Sea is published by ICIS at $895-925/tonne.

Following weeks of low demand because of political unrest across the region, the devaluation of the Turkish lira and the religious festival of Ramadan, there appeared to be more buying interest in the market this week.

However, traders said prices would need to come down in order to get volume moving again.

Although a Turkish importer described the market as quiet, it said it was looking to bring in some cargoes.

“The market is very quiet, but we are thinking of booking some cargoes and we have some requests. Demand is Turkey is a bit slow due to Ramadan, but it’s steady. We booked some cargoes in the ICIS range a few weeks ago,” the importer said.

The importer added that buyers were waiting for prices to come down, but felt this was unlikely to happen.

“There is always the expectation that prices will go down, but with crude at this level - people need to be realistic,” it said.

A Turkish consumer was looking to buy SN150 and SN500 but said the offers were too high.

Another Turkish source said: “Transactions are very limited. Refiners are staying at the high end and hoping for $900/tonne CIF [cost insurance freight] Istanbul.

“We don't want to pay higher prices. They [the refiners] say about crude oil and naphtha prices and they think they can place it, but we will wait-and-see.”

($1 = €0.77)

By: Julia Meehan
+44 20 8652 3214

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