Group l prices have fallen and are now between $1280 and $1345/t for the light solvent neutrals, and $1295 to $1375/t for heavy neutrals SN 500 and SN 600. These new levels reflect severe falls at the top of the ranges. There is also weakness at the bottom of the ranges, particularly where quality is not A1, and buyers are able to negotiate.

Even bright stock has been knocked somewhat from its lofty perch on the pricing scale, with reports of some sellers discounting index-linked prices for future large cargo sales over the next three months. This has provided the ammunition for buyers to insist on similar levels for prompt spot business. Bright stock prices may change dramatically over the next few days, but are now between $1490 and $1545/t, based on offers made to buyers from European producers this week. These levels are still linked to prices published elsewhere, but do not carry the high premiums as before.

Russian prices from the Baltic are standing up well to buying pressure, with sellers using the turnarounds at two production units to say there could be shortages in the next few months. This is being treated as scaremongering to a degree, as others foresee no shortages. Prices have slid downwards, with SN 150 and SN 500 offered between $1225 and $1265/t, and heavier SN 900 grades around $1355/t.

Black Sea Russian, Uzbek and Turkmenistan grades are now being offered through Black Sea ports, where a severe shortage of intermediary storage is becoming a problem for sellers and buyers alike. Some ports have limited draft and small tanks for each grade, which prevents loading of larger cargoes which could be economic to ship to deep water locations. These limitations however ensure that the local markets in Turkey and Romania are well served with plentiful availabilities in small cargo lots of 2,000 to 5,000 tons.

Prices in the Black Sea this week have declined in line with Baltic levels, with buyers holding the reins when negotiating with sellers. Levels are now $1220 to $1255/t basis delivered CIF main northern Turkish ports, some $10 to $20/t lower than previously seen in this region.

The Middle East Gulf is also experiencing price erosion, particularly on Group l grades. Group II prices from Far East have also come under scrutiny and are some $60 to $75/t lower than cargoes delivered last month.

Iranian Group l grades SN 150, SN 500 and SN 650 are all available both directly from Iran and also as re-exports from UAE. Prices have retracted yet again, with offers for quantities of SN 500 around $1175/t basis FOB UAE ports. One offer for SN 650 and a small quantity of SN 150 was heard at $1135/t and $1180/t respectively, FOB BIK port. (The SN 150 and particularly the SN 650 grade were not considered to be prime material.)

Saudi Arabian producers also appear to have plenty of material to sell and have adjusted their prices accordingly. These prices have not fallen to Iranian levels, nor have they kept up with European levels. They lie somewhere in the middle, with solvent neutrals around $1260 to $1340/t and bright stock between $1450 and $1500/t, depending on size of cargo and method of delivery.

In South Africa, end users want to see prices for lubes falling in light of what is happening elsewhere.

West Africa continues to look for imported material but at much lower prices than before. Offers are being returned by receivers, stating that they are risible and unacceptable. Even submissions for offers based on Russian Baltic supplies are being declined with the local traders stating that levels are not sustainable in their market and that lower prices will have to be offered if suppliers want to participate in the local scene

Some players in Nigeria have turned to importing small quantities of base oil in flexitanks, avoiding purchasing cargo sized lots at this time, in the belief that prices have much further to fall. Even if these imports are higher priced than bulk cargoes, they can ease the cash flow and can stem the inventories until prices can be agreed for the return to bulk buying.

There are exceptions to the above, with two cargoes form the Baltic loading for Nigeria, and another cargo from a European major destined for Ghana under the terms of the national tender.

Price levels for prompt imports into Nigeria are $1430 to $1465/t for light and medium solvent neutrals, with the heavier SN 900 grade being offered around $1525/t.

Prime European material finding its way into West Africa is priced around $1510 to $1535/t for the neutrals, with bright stock now being offered into Nigeria at $1625/t.

European Group II prices have come under the spotlight, and suppliers are now being requested to review ex tank prices on an urgent basis, since there have been no price falls in these grades for a long time. It will take a couple of weeks for new prices to filter through the market, but it is anticipated that numbers will be adjusted downwards by some $50 to $70/t, until importers can judge exactly where the market now lies.

Not so with Group III grades within Europe. The market for these grades is overall short, and this will likely continue until the flow of Middle East Gulf new production hits the region. Prices therefore remain unaltered for this week: 1385 to 1450/t for the light 4 cSt oils and 1390 to 1475 for 6 cSt material, sold ex tank.

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.