August Domestic South African base oils prices expected to increase

24 July 2013 17:00  [Source: ICIS news]

LONDON (ICIS)--Domestic South African base oil prices in rand (R) are expected to increase in August, sources said on Wednesday.

One distributor said it expects to see gains of around R0.30/kg ($31/tonne) on all grades.

The increase is expected because of the loss in value suffered by the rand during May, of around 11%.

This devaluation increased the cost, in rand terms, of imports, which are purchased in dollars, and so sellers increased their rand sell-on prices to compensate.

However, sellers only implemented gradual price increases so as not to deter buyers, and sources say the roughly 11% drop in value of the rand has not yet been fully compensated for.

Furthermore, the market is fairly tight, with one source calling it a suppliers market. Suppliers are expected to increase rand prices even beyond the level at which they will compensate for the devalued currency.

Distributors said that, some hesitation aside from a handle of automotive lubricant blenders, the price increases in June and July did not deter buying interest.

($1 = R9.71)

By: Ross Yeo
+44 208 652 3214

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly