Spain’s Feb Cartagena exports hold firm

Exports of premium-grade base oils from the Spanish port of Cartagena held firm in February, adding to a recovery in supplies in the European market.

Availability in Europe had tightened in recent months because of plant maintenance in the region and Mideast Gulf late last year.

A slowdown in shipments from Asia-Pacific to Europe at the beginning of this year exended the tightness.

Europe’s Group III base oils prices held firm relative to crude and diesel so far this year even as Group I and Group II prices faced sustained downward pressure.

The firm prices reflected the tighter supply and firm demand for the premium-grade supplies.

That dynamic should get support from a further rise in demand over the coming weeks ahead of and during the spring oil-change season.

But supply is also set to rise as signs of a pick-up in shipments from Mideast Gulf and Asia-Pacific supplements the firm export volumes from Spain.

Some of the shipments were set to reach Europe in first-half March.

Exports of more than 55,000t of premium-grade base oils from Cartagena in February edged up from the previous month, port data showed.

The volume was up from average shipments of less than 45,000 t/month in 2022.

Premium-grade exports from Spain accounted for more than 30pc of Europe’s Group III base oils supplies in 2022. The share was up from around 25pc of the total the previous year.

Spain’s rising share increased the country’s importance as the key supplier of premium grades for the European market.

It also increased the impact of any drop in supplies from Spain because of factors like plant maintenance work.

The most recent plant maintenance work in the country was in mid-2021.

A rise in premium-grade shipments from other sources like Mideast Gulf and Asia-Pacific would ease Europe’s reliance on supplies from Spain.

European base oils prices would need to stay at competitive levels relative to other regions for that trend to continue.