April shipments fall from Spain’s Cartagena

Exports of premium-grade base oils from the Spanish port of Cartagena fell in April from the previous month amid a slowdown in shipments to France.

Total shipments of more than 40,000t in April fell from over 55,000t the previous month, Port Authority of Cartagena (PAC) data showed.

Even so, the monthly volume remained higher than usual.

Total shipments of more than 175,000t from Cartagena in the first four months of the year were up 24pc from less than 142,000t during the same period last year.

The pick-up in flows from Spain has coincided with steady exports from Finland at the start of this year. Both markets are key sources of premium-grade base oils.

The pick-up in availability contrasted with unusually tight supplies during the first half of last year especially. The period coincided with a heavy round of plant maintenance in Europe and in other key markets like South Korea.

European Group III base oil prices surged during that period in response to the supply tightness.

The improved availability this year has contrasted with increasingly tight supplies of Group I base oils in Europe.

European Group I base oil prices have surged in recent months in response to the growing tightness.

Group III prices have also risen, but less sharply. The discount of Group I prices to Group III prices has narrowed sharply in response.

The narrowing discount between Group I and Group III prices is incentivizing blenders to switch to using more Group III base oils instead.