A stock exchange in Minsk, Belarus, started regular trading of finished lubricants last week after officials saw increased interest for trades of these products on its electronic platform.
The Belorussian Universal Commodity Exchange, a joint stock company with a controlling stake owned by the government, plans to host the buying and selling of automotive engine oils as well as hydraulic and transmission fluids, compressor and turbine oils and other industrial lubricants of domestic and foreign origin, the company said in a recent news release.
Officials expect the platform to simplify the search and lower costs for procurement of these products.
“Any new sales channel helps the market,” Artem Mazaev, a Moscow -based independent consultant in the lubricant industry, told Lube Report yesterday. “The presence of lubricating materials on the stock exchange improves the sales, gives better access to these products, and develops the competition. Higher competition means lower prices.”
In Minsk, the regular trading sessions for lubricants started Feb. 1, although some trading happened last month, when the platform executed 56 contracts. The decision was based on results from a study of stock exchange prices for lubricants.
“Thanks to the higher presence of suppliers, we observe 5% to 10% lower prices of these products compared to those off exchange,” the company said.
The stock exchange for lubricants, versus the off-exchange market transactions, has its own downsides too, according to Mazaev.
“The exchange offers limited product types, customers need to buy in larger quantities in bulk, it is only for such companies that buy in bulk, and can only be used as an additional source for product supply,” he said.
Belarus and some other former member states of the Soviet Union require crude oils, fuels and other petroleum commodities to be traded on stock exchanges, but lubricants and base oils are not subject to such requirements. As a result, many market players are unfamiliar with stock exchange trading.
BUCE supported exchange trading of lubricants with an active information campaign aimed at attracting more sellers and buyers for the products.
Four years ago, the Russian St. Petersburg International Commodity Exchange began to execute transactions for lubricants on its electronic platform. The most active company on this platform is state-owned Rosneft-Lubricants.