Turkish base oil market unsure of post-Ramadan demand pick-up

23 July 2013 17:19  [Source: ICIS news]

LONDON (ICIS)--Demand for base oils in the Black Sea, largely for the Turkish market, may or may not pick-up following the religious festival of Ramadan, sources buying and selling in the region said on Tuesday.

An importer and exporter of SN150 and SN500 to Turkey said: “There is no action in the market. I am looking for $900/tonne, but nobody is giving it to us and customers are not willing to pay anything higher, so demand is extremely low.

“We are coming to the end of Ramadan, then there is a week’s holiday and nobody wants big stocks. Maybe [by] mid-August, we might see things picking up,” the Turkish source added.

The price for SN150 and SN500 FOB (free on board) Black Sea has been determined by ICIS at $895-925/tonne (€680-703/tonne).

In relation to its Black Sea demand, another importer/exporter said: “Demand is there, it’s the price that is under pressure. There is a holiday, but obviously everything will be closed - customs and banks in Turkey – so things will slow.”

A third source importing and exporting base oils into Turkey said it had been offered material from various European traders, but the quality of material had “not been great”.

“From the Black Sea, we didn’t book anything new. We are waiting to hear from a couple of suppliers, but I think with crude oil [so high] they don't want to offer,” it said.

Traders also spoke about a quiet market, one said: “Turkey is more or less the same. The Baltic is the same, but I am seeing the UAE (United Arab Emirates) and India a bit slow, because of the devaluation in the Indian rupee.”

While demand in Turkey has slowed because of a combination of factors including Ramadan, political unrest and the devaluation of the Turkish lira, the general consensus among Turkish buyers is that demand is there, but prices are too high.  

A buyer, based in Turkey, echoed the general market opinion.

“Nothing has changed. I am still looking to buy, but need lower numbers,” it said.

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

($ = €0.76)

By: Julia Meehan
+44 20 8652 3214

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