Group I base oils steady in Mexico on demand

15 November 2013 20:03  [Source: ICIS news]

HOUSTON (ICIS)--Group I base oils are steady in Mexico as a preferred base stock for that regional market, a base oil buyer commented on the sidelines of this week’s American Fuel & Petroleum Manufacturers (AFPM) Lubricants & Waxes conference in Houston, Texas.

“We use Group I and Group II in blending but we do not always have to do this,” one buyer said.

With Group II prices nearing parity with Group I in some base oil grades, more Group II has moved into the Mexican market from the US during 2013.

But the local base oil producer, Pemex, produces Group I base oils at its Salamanca, Mexico, plant location and serves a significant portion of the Mexican finished lubricant demand requirements.

Mexico has quiet demand for now so we do not need so much material,” a buyer said.

The Salamanca facility produces 6,000 bbl/day of Group I base oils and has been in a 30-35 day maintenance turnaround since about 13 October.

Buyer sources said that during the course of the turnaround very little additional base oil purchases have been needed because Mexican demand is slow.

“I am getting attractive price offers from Europe for import, but I do not need the base oils,” one buyer said.

Group I brightstock spot prices are currently assessed at $3.74-3.80/gal on FOB (free on board) basis at Brownsville, Texas.

The buyer said offers from Europe are moving lower than the Brownsville number, but the Pemex Group I production – even during the turnaround – is sufficiently meeting regional demand needs.

The conference ended on Friday.

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By: Judith Taylor
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