摘要：A rather unexciting time for EMEA base oil markets, with a certain degree of reluctance creeping into the marketplace and causing them to flat line during the week...
A rather unexciting time for EMEA base oil markets, with a certain degree of reluctance creeping into the marketplace and causing them to flat line during the week.
While buyers are reluctant to pay asking prices, they are accepting some offers because of limited availabilities for large parcels of mixed grades. At the same time, sellers are reluctant to part with material at prices they consider to be below market value. But with lack of demand now playing a huge part in the base oil scene, they appear to have no choice other than to offer lower prices.
This conundrum is not particularly healthy for business, and the market is depressed to the extent that there are few locations where export barrels can be paced which could take up the slack from underperforming local or domestic markets. With falling business, some producers are cutting back where possible to make alternative products such as low-sulphur diesel and other gas oil.
Dated Brent crude is fundamentally stable, coasting at $113 per barrel, only marginally ahead of last week’s levels by $1 per bbl. ICE gas oil front month closed at $993 per metric ton in early week trading, moving slightly upwards due to crude and also perhaps seasonal demand.
Even with a couple of major turnarounds currently underway in Europe, API Group l prices remain unaltered from last week, with little scope for either sellers or buyers to alter this position. Levels are $1065 to $1090/t for light viscosity grades from SN 70 through to SN 150. The heavier SN 500/600 material is between $1075 and $1100/t. Bright stock remains at $1090 to $1145/t for export sales.
The above prices refer to FOB sales and offers ex mainstream supply sources within the European mainland and North Africa, as availability of material allows.
The local European market, however, has seen prices weaken again with differentials between theoretical local and export prices falling to less than $100/t. This weakness in the local markets has come about due to increased availabilities of all types of base oils from various different sources. Suppliers have been keen to widen their operations and have ventured into new areas where local or national competition has had to respond by lowering prices to retain business and market share.
Baltic and Black Seas
Baltic suppliers remained quiet this week, with most traders already having export barrels for receivers in West Africa and Central America. Distributors are looking to replenish stocks in the Baltic for second half October and November lifting. Offers for SN 150 and SN 500 are currently $1050 to $1080/t basis FOB, depending on quality and quantity. Buyers are trying to counter these levels down to $1025 to $1040/t, stating that their receivers cannot afford to pay more in the local markets where these products find a home.
Black Sea prices are also at a standstill, with few movements this week. Russian prices are $1055 to $1070/t basis CIF main Turkish ports, netting back to FOB levels at $35/t less. Offers up to and above $1100/t delivered still permeate the market. These offers are generally for much higher spec Group l material from South America and Western Europe, and cannot compete pricewise with Russian and Uzbek supplies coming out of Ukraine and Azov. Attempts are being made to bring large cargoes of Iranian/UAE Group l grades into Turkey, although the economics suggest that this arbitrage is difficult to attain. No confirmation of any vessels being fixed has come to light.
Middle East
The supply of Iranian Group l grades continues in small local vessels from southern Iranian ports into UAE. These shipments, accounted for in local currencies, are transhipped through UAE, modifying the status of the origin of the material in process. Stocks held in UAE can be blended grades with other material from India and Pakistan being used to formulate UAE origin SN 150, SN 500 and SN 650. Prices have not moved over the last few weeks with FOB offers at $1070 to $1085/t and flexibag prices for SN 150 and SN 500 at $1165 to $1180/t on same delivery basis.
Iranian producers have announced a sell tender for some 10,000 tons of mixed Group l grades, including a quantity of Iranian bright stock. How this tender will be negotiated and how the oil will be delivered is difficult to fathom, since due to sanctions, no P&I Club will insure international vessels loading out of Iranian ports. This makes it impossible to lift the cargo in anything other than small quantities for shipment to UAE.
Activity in Saudi Arabia, Kuwait, and other GCC states continues on a local supply basis, with few exports finding their way to traditional buyers in Lebanon and Syria, where war-torn areas do not lend themselves to a proliferation of business. Jordan blenders have issued enquiries for Group l grades to be delivered into storage in Aqaba, but comments from traders who have offered for this supply previously suggest that incumbent suppliers from Saudi Arabia would continue to supply this business.
Africa
East and South Africa maintain their activities but at a lower pitch than a few weeks ago, with many smaller importers having already bought material from UAE and India for Q4 stocks and usage. Prices for imports of small quantities of Group l SN 150 and SN 500 are confirmed at $1285 to $1320/t into ports such as Durban and Mombasa, with very little freight differentials between East African ports for containerised deliveries in flexies.
South African base oil supplies are still subject to the large refinery turnaround taking place during October, although no comments have been received stating that there are any problems with supply. The lubricant market in South Africa appears to be expanding and players are looking to acquire supplementary supplies of Group l base oils from outside the country, being limited only by a lack of third party storage in the main ports.
West Africa, Nigeria in particular, has seen the arrival of the first of a few cargoes from mainland Europe and the Baltic with large quantities of Group l base oils. Landed CFR prices are surprisingly competitive with almost all reported levels being between $1125 and $1155/t for the range of solvent neutrals, excluding SN 900 loaded out of the Baltic which has been assessed at around $1180/t and bright stock, where part of a cargo is being priced at $1210 to $1230/t. The spreads for all the grades are larger than expected due to some mainland European supplies, particularly ex central Mediterranean, carrying hefty FOB premia of $40 to $60/t above other supplies.
Group II/III
Group ll prices in Europe appear to be holding up well with reported demand for imports coming from the Far East and the United States. These grades are maintaining what is termed a healthy differential apart from Group l prices, with many blenders looking to integrate these grades into their formulation slates. Prices have strengthened over the past two weeks, with sales ex tank increasing by $10 to $20/t. Levels are now reported at $1170 to $1195/t for light vis grades, with heavier material such as 500N/600N selling on basis ex tank at $1210 to $1275/t.
Middle East Gulf prices for Group ll grades have stirred a little this week, with many Far Eastern producers taking material out of their region due to poor local demand. Efforts to sell into regions such as India and the Middle East Gulf have been renewed with vigour, and prices have been adjusted to make these products attractive, even if demand is not as many would wish. Prices are now in line with Far East sources, which have stabilised during the past week with some small demand spikes from Chinese buyers. Levels are now at $1050 to $1090/t for light grades, with high vis material at $1125 to $1165/t, basis CFR Middle East Gulf ports.
Group lll base oils appear to be taking a bit of a bashing in the European market, with producers deciding to discount some prices by as much as €50/t to protect sales from competition. This has lowered the spreads for these grades by some €40 across the board. Price levels for 4 cSt grades are €1080 to €1100/t for 4cst grades, with 6cst material selling ex tank at €1120 to €1150/t. This down pricing has purely been attributed to the growing availability of Group lll grades in Europe, and with demand still low for new technology type finished lubes, this supply scene for Group lll base stocks will only get longer until demand reappears.
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While buyers are reluctant to pay asking prices, they are accepting some offers because of limited availabilities for large parcels of mixed grades. At the same time, sellers are reluctant to part with material at prices they consider to be below market value. But with lack of demand now playing a huge part in the base oil scene, they appear to have no choice other than to offer lower prices.
This conundrum is not particularly healthy for business, and the market is depressed to the extent that there are few locations where export barrels can be paced which could take up the slack from underperforming local or domestic markets. With falling business, some producers are cutting back where possible to make alternative products such as low-sulphur diesel and other gas oil.
Dated Brent crude is fundamentally stable, coasting at $113 per barrel, only marginally ahead of last week’s levels by $1 per bbl. ICE gas oil front month closed at $993 per metric ton in early week trading, moving slightly upwards due to crude and also perhaps seasonal demand.
Even with a couple of major turnarounds currently underway in Europe, API Group l prices remain unaltered from last week, with little scope for either sellers or buyers to alter this position. Levels are $1065 to $1090/t for light viscosity grades from SN 70 through to SN 150. The heavier SN 500/600 material is between $1075 and $1100/t. Bright stock remains at $1090 to $1145/t for export sales.
The above prices refer to FOB sales and offers ex mainstream supply sources within the European mainland and North Africa, as availability of material allows.
The local European market, however, has seen prices weaken again with differentials between theoretical local and export prices falling to less than $100/t. This weakness in the local markets has come about due to increased availabilities of all types of base oils from various different sources. Suppliers have been keen to widen their operations and have ventured into new areas where local or national competition has had to respond by lowering prices to retain business and market share.
Baltic and Black Seas
Baltic suppliers remained quiet this week, with most traders already having export barrels for receivers in West Africa and Central America. Distributors are looking to replenish stocks in the Baltic for second half October and November lifting. Offers for SN 150 and SN 500 are currently $1050 to $1080/t basis FOB, depending on quality and quantity. Buyers are trying to counter these levels down to $1025 to $1040/t, stating that their receivers cannot afford to pay more in the local markets where these products find a home.
Black Sea prices are also at a standstill, with few movements this week. Russian prices are $1055 to $1070/t basis CIF main Turkish ports, netting back to FOB levels at $35/t less. Offers up to and above $1100/t delivered still permeate the market. These offers are generally for much higher spec Group l material from South America and Western Europe, and cannot compete pricewise with Russian and Uzbek supplies coming out of Ukraine and Azov. Attempts are being made to bring large cargoes of Iranian/UAE Group l grades into Turkey, although the economics suggest that this arbitrage is difficult to attain. No confirmation of any vessels being fixed has come to light.
Middle East
The supply of Iranian Group l grades continues in small local vessels from southern Iranian ports into UAE. These shipments, accounted for in local currencies, are transhipped through UAE, modifying the status of the origin of the material in process. Stocks held in UAE can be blended grades with other material from India and Pakistan being used to formulate UAE origin SN 150, SN 500 and SN 650. Prices have not moved over the last few weeks with FOB offers at $1070 to $1085/t and flexibag prices for SN 150 and SN 500 at $1165 to $1180/t on same delivery basis.
Iranian producers have announced a sell tender for some 10,000 tons of mixed Group l grades, including a quantity of Iranian bright stock. How this tender will be negotiated and how the oil will be delivered is difficult to fathom, since due to sanctions, no P&I Club will insure international vessels loading out of Iranian ports. This makes it impossible to lift the cargo in anything other than small quantities for shipment to UAE.
Activity in Saudi Arabia, Kuwait, and other GCC states continues on a local supply basis, with few exports finding their way to traditional buyers in Lebanon and Syria, where war-torn areas do not lend themselves to a proliferation of business. Jordan blenders have issued enquiries for Group l grades to be delivered into storage in Aqaba, but comments from traders who have offered for this supply previously suggest that incumbent suppliers from Saudi Arabia would continue to supply this business.
Africa
East and South Africa maintain their activities but at a lower pitch than a few weeks ago, with many smaller importers having already bought material from UAE and India for Q4 stocks and usage. Prices for imports of small quantities of Group l SN 150 and SN 500 are confirmed at $1285 to $1320/t into ports such as Durban and Mombasa, with very little freight differentials between East African ports for containerised deliveries in flexies.
South African base oil supplies are still subject to the large refinery turnaround taking place during October, although no comments have been received stating that there are any problems with supply. The lubricant market in South Africa appears to be expanding and players are looking to acquire supplementary supplies of Group l base oils from outside the country, being limited only by a lack of third party storage in the main ports.
West Africa, Nigeria in particular, has seen the arrival of the first of a few cargoes from mainland Europe and the Baltic with large quantities of Group l base oils. Landed CFR prices are surprisingly competitive with almost all reported levels being between $1125 and $1155/t for the range of solvent neutrals, excluding SN 900 loaded out of the Baltic which has been assessed at around $1180/t and bright stock, where part of a cargo is being priced at $1210 to $1230/t. The spreads for all the grades are larger than expected due to some mainland European supplies, particularly ex central Mediterranean, carrying hefty FOB premia of $40 to $60/t above other supplies.
Group II/III
Group ll prices in Europe appear to be holding up well with reported demand for imports coming from the Far East and the United States. These grades are maintaining what is termed a healthy differential apart from Group l prices, with many blenders looking to integrate these grades into their formulation slates. Prices have strengthened over the past two weeks, with sales ex tank increasing by $10 to $20/t. Levels are now reported at $1170 to $1195/t for light vis grades, with heavier material such as 500N/600N selling on basis ex tank at $1210 to $1275/t.
Middle East Gulf prices for Group ll grades have stirred a little this week, with many Far Eastern producers taking material out of their region due to poor local demand. Efforts to sell into regions such as India and the Middle East Gulf have been renewed with vigour, and prices have been adjusted to make these products attractive, even if demand is not as many would wish. Prices are now in line with Far East sources, which have stabilised during the past week with some small demand spikes from Chinese buyers. Levels are now at $1050 to $1090/t for light grades, with high vis material at $1125 to $1165/t, basis CFR Middle East Gulf ports.
Group lll base oils appear to be taking a bit of a bashing in the European market, with producers deciding to discount some prices by as much as €50/t to protect sales from competition. This has lowered the spreads for these grades by some €40 across the board. Price levels for 4 cSt grades are €1080 to €1100/t for 4cst grades, with 6cst material selling ex tank at €1120 to €1150/t. This down pricing has purely been attributed to the growing availability of Group lll grades in Europe, and with demand still low for new technology type finished lubes, this supply scene for Group lll base stocks will only get longer until demand reappears.
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