The arrival of spring does not only bring longer days, warmer weather and cherry blossoms; it also ushers in revived activity in base oil markets. This optimistic time of the year often acts as the overture to a symphony of changes, from a crescendo in sales to an allegro in production rates and competition as the industry awakens from its hibernal slumber.
In late January and early February, base oil and lubricant suppliers detected the first signs of an increased buying rhythm, although some players admitted that demand was not quite as strong as it had been during the same period the previous year. Many lingering uncertainties, such as ongoing inflation and steep raw materials and transportation costs, were still affecting purchase plans. Buyers remained cautious on concerns that base oil prices might move down, catching them with pricey inventories, as values had been on a downward trend during the first few weeks of 2023. Producers had granted temporary value allowances or adjustments in November and December, and this contrasted sharply with the consecutive rounds of base oil price increases seen at the beginning of 2022.