European Group I base oil export markets were on a firm footing in mid-February 2013, amid signs of improved demand from key markets like Turkey.
Prices rose across Europe, the Baltic Sea and Black Sea as a result.
By contrast, the domestic Group I base oil market was stagnant, suffering from sufficient supply and lacklustre downstream demand.
However, domestic values climbed by mid-March, increasing the spread between base oil sales prices and upstream vacuum gasoil (VGO) costs, and therefore, easing suppliers’ margins.
By early May, any upward momentum the Group I export and domestic markets experienced earlier in the year had been lost.
Wider economic concerns and falling feedstock values encouraged cautious buying habits.
European solvent neutral (SN) 150 export prices were holding at $995-1,025/tonne FOB, a move from $920-955/tonne FOB in mid-February.
Group III prices trended down over the period as sellers competed for market share.
The European base oil market remains hampered by challenging finished lubricant market conditions. The latest statistics from downstream consuming industries, such as the automotive sector, reinforce the gloomy picture.
Updated to mid-May 2013