SINGAPORE (ICIS)--Prices of Group I base oils in the United Arab Emirates (UAE) continued their recent gains and hit three-year highs in the week ended 7 December amid tight supply and firm crude oil prices.
For SN500 Group I base oils in the UAE, the ICIS assessed ranges were higher by $15-20/tonne this week to reflect higher prices heard from producers Iran.
Offers and discussions for SN500 base oils were at $770-790/tonne ex-tank Sharjah while offers for import cargoes in the UAE were also at around $780/tonne CFR (cost & freight) UAE. These were the highest prices since December 2014.
A key producer in Iran said it deemed current market selling indications at around $750-760/tonne FOB (free on board) Iran due to the limited supply availability.
There were limited offers heard from other producers due to holidays in Iran this week.
As such the ICIS assessment range for SN500 was increased to $730-755/tonne FOB Iran to reflect the higher selling indications in the absence of any firm deals or offers this week. These were the highest levels seen since ICIS began tracking FOB Iran prices in early 2016.
SN500 buyers, however, continued to resist these latest round of price hikes, with some refraining from actively bidding for fresh shipments.
In SN150, there were no confirmed offers from any Iranian producers.
Offers for import cargoes in the UAE were higher at $710/tonne CFR UAE while other offers were also at $730-740/tonne ex-tank Sharjah.
Taking into account the netback less shipping costs, the ICIS assessed price range for SN150 in Iran was increased by $10/tonne to $645-680/tonne FOB Iran.
Still in the UAE, discussions were for non-Iran origin SN500 in the $815-820/tonne CFR UAE range but the6se could not be verified.
The outlook for Group I prices in the Middle East was healthy and most players expected prices to remain supported in coming weeks.
Although buyers in the Middle East were showing resistance to the recent increases, prices for Iranian Group I were expected to be bolstered by expected strong demand in parts of Asia and Africa as well.