12 February 2014 12:08 [Source: ICB]
A quiet start to 2014 across base oil markets globally has seen reports of lacklustre demand and stable pricing. However, many appear optimistic that business will pick up.
The European market remains subdued, with prices having steadied after undergoing a dip towards the end of last year. At the start of 2014, some players said they expected numbers to rally. Downward pressure is anticipated for Group I prices given Group II imports arriving on European shores from Chevron’s new plant in the US. Refiners remain hopeful of increases during the first quarter.
Middle East prices have continued their descent in recent months and Group I values in late January were at low-to-mid $900s/tonne levels. Demand is said to be stable, although some speculate that consumption is soon set to improve. Looking ahead, supply is thought likely to tighten, with shutdowns that are taking place in Europe and Russia limiting cargoes.
Combined with start of the Iranian New Year holidays in March, the availability of imports is likely to be affected. The traditional upsurge in demand around this period may support a price uptrend.
In Asia, prices have remained largely stable since the start of the year. Activity in China was said to be extremely sluggish in advance of the Lunar New Year holidays at the end of January and few deals have been reported. Some lubricants companies plan to build stocks in expectation of price hikes from February during the peak demand season. News of feedstock supply shortages have also been prevalent through January. Maintenance will also affect base oils supply in the coming months.
For information about these ICIS Base Oils & Lubricants conferences, please contact: firstname.lastname@example.org
ICIS will also be holding its regular base oils training courses throughout the year. Contact email@example.com
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