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Editor James Mills, james.mills@icis.com
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Signs of a tightening market encouraged producers to quote higher price ideas for export volumes, but traders said they were finding it difficult pass higher numbers through to export markets.
Demand for base oil cargoes was heard from South America, Africa, the eastern Mediterranean, Bangladesh and east Asia, but traders continued to look for larger cargoes and lower prices than those being offered for export from Europe.
Domestic European markets presented a different picture. Demand had not improved significantly and both buyers and sellers reported comfortable inventories. Buyers said some suppliers were pressing them to accept greater volumes under contract.
A northwest European producer said efforts to raise prices for deliveries by truck had failed. A trader received urgent enquiries from a northwest European buyer for small volumes of brightstock but said this reflected an isolated case rather than a general shortage of material.
Group III base oil prices maintained a similarly steady trend, with variations depending on supplier. Truckloads of 4cSt material were still quoted at levels around €700-710/tonne FCA Antwerp
Enquiries for export cargoes of Group I base oils multiplied during the week, but traders found it difficult to match European supplies with export demand.
Prompt volumes of SN150 or brightstock needed to complete a larger cargo destined for South America were not on offer at prices acceptable to the buyer. Traders said that firm bids from Turkey – notably for 6,000 tonnes of SN100 – had not been satisfied. Traders also scrambled unsuccessfully to assemble up to 4,000 tonnes of SN500 for export to Bangladesh.
New buying interest for various grades was also detected in Greece, Syria and Kenya. Shipping enquiries for cargoes of base oils to move to Ghana and Kenya were thought related to contract business or earlier completed tenders.
Traders said they had bought two cargoes of SN500 at FOB northwest Europe prices within the reported range, and a cargo of SN150 at $750/tonne FOB northwest Europe. The recent purchase of a brightstock cargo at a price within the FOB Europe export range was also reported.
Producers in southwestern Europe said they had sold two cargoes of SN150, one for delivery to the Mediterranean and another for west Africa, at prices $3-5/tonne higher than ICIS-high FOB Europe quotes. Two March cargoes of SN500 – one of 2,000 tonnes and the other of unspecified volume – were offered from the same region at ICIS-high FOB Europe plus $15/tonne, so far without success.
Two north African cargoes of around 2,000 tonnes each of SN100 and SN300 were offered through a tender closing today. The seller was indicating prices at ICIS-high FOB Europe. The outcome of an earlier north African tender for volumes of SN100, SN150 and up to 4,000 tonnes of a heavier paraffinic grade was not revealed.
Exports from Russia and the newly independent states were seen slowing. One Russian producer said March volumes had been sold out and that scheduled maintenance at three units would reduce availabilities until mid-June.
Traders noted that exports from Baltic Sea ports remain difficult owing to thick ice in many ports.
Reports that a producer would stop producing oils at a Russian refinery have not been confirmed. Rumours of a permanent shutdown starting in May or September continued to circulate.
Brent April crude oil futures were trading around $78.32/bbl late on Tuesday, having risen through the day by around $1.40/bbl. European gasoil prices at $637-641/tonne FOB Rotterdam late Tuesday were around $11/tonne higher than a week earlier.
($1 = €0.74)
SHIPPING ENQUIRIES
2,000-2,800 tonnes Lubes Gdansk/Hull or ARA 3-6 March
4,500 tonnes Lubes Gdansk/Hull + Antwerp 3-6 March
3,900 tonnes Base Oils Le Havre + Fawley/Uddevalla 7-9 March
6,200 tonnes 2 gr Base Oils Rotterdam/Gebze ppt onwards
3,000 tonnes Base Oils Gdansk/Gebze 1H March
2,300 tonnes Lubes Algeciras/Gemlik 1-10 March
4,000 tonnes Lubes Livorno/Gebze 17 February-4 March
2,000 tonnes Lubes Gdansk/Guayaquil ppt
5,500 tonnes Base Oils Algeciras/Chittagong 5-15 March
2,500 tonnes Base Oils Livorno/Mombasa 12-15 March
4,500-5,200 tonnes Base Oils Livorno/Mumbai + Fujairah 2H March
2,850-9,600 tonnes 3 gr Lubes Augusta/Jebel Ali + Sharjah 12-17 March
8,000 tonnes Base Oils Theodosia/Chittagong + Singapore 1H March
4,500-5,000 tonnes Base Oils West Med/Chittagong 10-15 March
5,500 tonnes Lubes Theodosia + East Med/Singapore early March
1,900 tonnes 2 gr Base Oil Chennai/Trincomalee March dates
2,000 tonnes Base Oils Karachi/Sharjah 1-10 March
5,500 tonnes Base Oils Liepaja/Sudan 27 February-13 March
5,200 tonnes Base Oils Livorno/Tema 2H March
3,000 tonnes Base Oils Middle East/Singapore ppt onwards
3,000 tonnes Base Oils Sharjah/Chittagong ppt onwards
8,000 tonnes Easy Chems +/or Lubes Ulsan +/or Yosu/Mumbai 3-13 March
5,000 tonnes SN500 Base Oil Bandar Bushehr/Mombasa ppt
This week on ICIS news ( www.icis.com):
02-Mar-10 08:15 Indian base oils import duty hike takes market by surprise
01-Mar-10 04:06 China's Yanshan paraffin wax unit running full after restart
25-Feb-10 14:19 Lubrizol targets 32% profit growth by 2012
25-Feb-10 10:14 Total restarts France refinery production as strikes called off
24-Feb-10 12:02 Romania's Oltchim seeks loan to restart Arpechim refinery
The 4th Asian Base Oils & Lubricants Conference
8th - 9th June 2010, Millennium Seoul Hilton Hotel, Seoul, South Korea
Visit: www.icis.com/asianbaseoils
Early Booking Discount
Book before 31st March 2010 and save $250
