Some segments of the base oils market have tipped towards the tight side, while others showed some lengthening given high production rates and slowing demand. The extended turnaround at a U.S. Gulf plant, along with upcoming maintenance programs, were taking product out of the supply system. At the same time, additive shortages forced some blenders to run at reduced rates and cut back on base oil consumption and purchases.
As reported last week, a major API Group I and Group II refiner was heard to have extended a turnaround that had started a couple of months ago as it encountered an equipment failure when it was ready to restart its base oils plant. The producer was expected to attempt a fresh restart this week, following repairs, but further details were unavailable. As a result of the prolonged shutdown, the producer has limited availability and was not entertaining additional or incremental orders, but customers have not been placed under sales control or allocation as the supplier had built inventories ahead of the turnaround. The company was also expected to start to pad inventories during the last quarter of the year as it has scheduled maintenance at a second Group I base oils unit in early 2023.
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