API Group I FOB prices within Europe have only tweaked $5-$10 where sellers could push higher numbers, or where buyers were able to counter by a few dollars to close a deal. Levels are maintained, with light solvent neutrals at $1035-$1065/t and heavier neutrals such as SN 500 at $1035-$1065/t. Bright stock is also unchanged at $1250-$1265/t.

These price levels pertain to bulk cargoes of export material available ex mainstream supply points around mainland Europe and African Mediterranean ports.

Local European markets should be amid the busiest time of the year. However, Mediterranean blenders have said that trade has not yet responded to small improvements in the economies of Greece, Italy and the Iberian Peninsula. In northern and Eastern Europe, business has picked up, with many of the larger blenders expressing positive regards. European Baltic and Benelux countries have joined United Kingdom players to witness finished lube consumption coming back to almost pre- 2008 levels. However, many blenders have said they feel the effects of consumers longer periods between oil changes as a result of producing ever higher-spec products.

Thus, local or domestic trade prices maintain a 90-120/t premium over export levels.

European Group II prices show no further increases attempted from East or West this past week. Most importers say theyre satisfied, still holding market share and increasing sales of these base oils against the rising tide of Group II availability.

Prices for light vis grades are still $1085-$1125/t, with heavier 500N and 600N ranging between $1195/t and $1285/t, all basis ex tank Antwerp-Rotterdam-Amsterdam.

Group III prices within Europe are flat. More players echoed that despite increased demand and even more production coming online later this year, the market can handle extra material flowing. However, the new production increases are significant, and should not be considered merely additional availability. Oversupply is still a specter which could affect the market later this year.

Levels are still 955-960/t for the sales of 4 cSt grades, with 6 cSt material between 965-975/t basis ex tank sales.

Baltic and Black Seas

Baltic offers for SN 150 and SN 500 from Russian and Belarus refineries appear to be back on the market, with some sellers reportedly having material in tank which must move in a timely manner due to further stocks arriving in June, which will build inventories back up to almost tank tops. However, this is not as dire as it may seem, since a number of traders and distributors decreased storage commitments after the Ukrainian situation erupted. Options to take increased storage exist in most Baltic loading ports, so a containment issue does not appear to be a problem.

A number of cargoes are under currently negotiation with major traders serving West Africa all looking at possibilities from the Baltic, or at least using Baltic loading as foundation cargo on which to build further quantities, perhaps from northwestern Europe or Atlantic Mediterranean.

Prices heard for standard Russian specifications were similar to last weeks, with SN 150 and SN 500 between $990/t and $1010/t.

SN 900 grades were being offered on DAF basis at around $1065/t, although the exact quality of the material was unknown.

Turkish buyers in the Black Sea have enquired for a number of requirements, with some preferring material offered from Iran. However, quantities have been inflated to 3,000 – 5,000 tons so that traders and Iranian suppliers would look at quantities being loaded ex Middle East Gulf. In reality, requirements are around 1,000 tons per parcel, opening up options for supplies of I-40A ex Uzbekistan, or SN 500 from Mediterranean in flexies to be considered.

Trade still appears much slower in the Black Sea regions than it was at the heights of around a year ago. Turkish markets have adjusted to the curtailment of fuel dilution with base oils, and genuine blenders have become more sophisticated in the quantity of material being utilized. Many are opting for supplies from Mediterranean producers with European mainstream specifications and also blend approvals, rather than using existing Russian avails for the heavier neutrals, and Uzbek (and currently Turkmeni) supplies for the lighter material.

Prices remain steady with Uzbek light grades offered at $995/t basis CIF Aliaga, Turkey, with heavier grades at $1010-$1025/t. Turkmeni delivered prices for SN 180 and SN 350 are reported in offers at $1000-$1020/t basis Gebze port.

Talks of shortages of Group I SN 150 in Middle East Gulf regions appears to have faded away, since a raft of offers was made to receivers in this region from traders and suppliers in Europe, the U.S., and Far East, with the apparent result that nearly every requirement has been covered within a week. There are also reports of available Iranian SN 150 material, which was not evident one week ago.

The arrival of Group I grades SN 150 and bright stock from Brazil and also from U.S. Gulf Coast has alleviated any supply problems which may have been looming, at least in United Arab Emirates. Further cargoes are being negotiated from both these supply points, but U.S. Group I material may come from the U.S. Atlantic Coast where Group I may be more available.

Middle East

Middle East Gulf regions are in full flow with other imports arriving into Oman, Fujairah and Sharjah from Red Sea sources, along with small parcels of Group I base oils coming from Pakistan. Bright stock remains an enigma within Middle East Gulf markets which depend to a large extent on imports making their way into various markets, from Oman to Bahrain. Prices for imports have been held high due to demand from European and U.S. markets where availability has recently been challenging. Brazilian suppliers have stepped into the breach but with offers for this grade at around $1300/t, and expectations of material landing at around $1225/t, Middle East Gulf buyers have been slow to realize that prices for large quantities of this grade have had to rise to current offer levels.

Taking the aforementioned into account, a receiver in U.A.E. has reported that a 1,000 ton parcel of bright stock, either from Indonesia or Thailand, has been purchased at $1195/t CIF.

Group II cargoes arriving into the southern Middle Eastern Gulf have reinforced the view that although sellers from Far East sources have tried to increase delivered prices, they have found rebuttal at every turn, and indeed if verification can be made to some of the material being landed into Qatar and U.A.E. this week, prices may have fallen some $10-$20/t since May. Levels are now $1080-$1115/t for the range of light vis grades, with 500N and 600N at $1100-$1135/t, basis CIF/CFR Middle East Gulf ports.

Africa

Parcels of SN 500 ex U.A.E. is being landed into ports such as Mombasa and Durban at around $1180/t in flexies, which can obviously compete after importation costs with local production from the tow refiners based in South Africa. This pricing information lends weight to the argument for looking at importing SN 500 from sources such as Baltic or Brazil if a break-bulk system is in place to afford this type of trade.

West African importers are looking for a number of cargoes of Group I base oils covering many different types of trade. All types of qualities are being grouped on various ships, from sources in the Baltic, U.S., Brazil and even U.A.E.

The grades SN 150 and SN 500 are largely recognizable, at least on a viscosity basis, but when it comes to various heavy SN blends along with some bright stock grades, there are enormous differences, and all imports should not be classed in the same quality spread.

Offers heard for the Group I combination cargoes were not dissimilar to those of last week, with heavy neutrals SN 500 and SN 600 between $1065/t and $1125/t and bright stock around $1285/t. Lower quality bright stock has been offered at $1258-$1268/t.

Other grades with lower specifications and different characteristics are mentioned as SN 750 at $1145/t, SN 850 at $1155/t, along with two grades of SN 900 — one at $1065/t, and another with completely different spec at $1195/t.

All prices are quality dependent, and are based on Group I grades delivered CFR/CIF into Ghana, Nigeria and in one case an offer into Cameroon.

Ray Masson is director of Pumacrown Ltd., a trader and broker of petroleum products in East Grinstead, U.K. Contact him directly at pumacrown@email.com.