10 September 2013 16:05 [Source: ICIS news]
LONDON (ICIS)--European Group III domestic base oil prices are steady to firm, largely on the back of recent gains in the value of crude oil, sources said on Tuesday.
A supplier of Group III trucks said prices have been firming “slowly”, adding that three unnamed producers had pushed up prices.
“It’s a little bit higher. [Named producer] went up and [named producer] went up. [Named producer] went up as well, but they were on the high side.
“We see overall people are prepared to pay a little bit more €940-950/tonne for 4 cSt (centistokes) and €950/tonne for 6 cSt - and people are paying these prices,” the supplier said.
The supplier believed that the market had finally bottomed out, particularly in light of gains in the values of Asian base oils.
“Demand is a little bit better. When I speak with blenders they are all rather satisfied - making some margins and getting plenty of orders,” the supplier added.
One the buying side, a consumer said its truck prices were stable, but attributed this to its long-term agreement with its contract partners.
“The market is really stable. I work with [named producers] and there are no indications of price changes,” the buyer said.
ICIS Group III 4 cSt is valued at €935-950/tonne ($1,247-1,267/tonne) FCA (free carrier) ARA (Amsterdam-Rotterdam-Antwerp), with 6 cSt at €945-960/tonne.
Group III 4cst and 6cst truck prices have held firm in recent months because of high gasoline, fuel and naphtha values, all of which as heavily linked to crude oil price developments.
However, prices are considerably lower year on year when 4 cSt was valued at €1,210-1,230/tonne and 6 cSt at €1,215-1,235/tonne.
The main use for base oils is in the manufacture of lubricants, of which there are thousands of types. The best known are automotive lubricants.
Group III base oils are a higher-quality lubricant and severely hydrocracked in order to achieve purer base oil.
($1 = €0.75)
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