03 September 2013 17:15 [Source: ICIS news]
LONDON (ICIS)--Domestic Group I base oil prices in northwest Europe have largely remained stable in September, despite many expectations to the contrary, sources sdai on Tuesday.
Producers said they had increased prices for a small number of customers, but mainly prices had been rolled over.
Several producers had previously stated they would like to implement increases in September because of narrow profit margins resulting from increasing feedstock costs.
However, producers and consumers alike said demand is simply not high enough to justify increases. Although demand is understood to have shown signs of increasing after the traditionally quiet month of August, consumption continues to be described as sluggish.
In addition to customer resistance, one producer also mentioned that the European holiday period in August had hampered efforts to negotiate higher prices with customers.
Because of the high feedstock costs, several sources said they expect prices to increase either in mid-September or October. The possibility of military strikes against the Syrian regime means crude oil prices could soar even higher, in which case base oil price increases would be almost inevitable, some sources said.
According to a trader, one western European producer has announced price increases of $25-35/tonne (€19-27/tonne) from 9 September, but this could not be confirmed.
($1 = €0.76)
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