Turkey Oct Grp I base oil imports steady

Turkey’s Group I base oils imports held firm in October as shipments from Russia surged to a six-year high.

The rise in base oils supplies from Russia to Turkey contrasted with a slump in shipments from Russia to Europe.

Europe had been a key outlet for Russian supplies.

The need for an alternative outlet, Turkey’s logistical proximity to Russia and its willingness to take delivery of its supplies made it an ideal destination.

Plentiful availability, and prices for Russian supplies at steep discounts to prices for shipments from other sources, added to their attraction.

Turkey’s base oils imports of 20,960t in October were almost the same as the previous month and up 17pc from year-earlier levels, government data showed.

Imports of 241,250t in the first ten months of the year were up 10pc from 218,360t during the same period a year earlier.

The rise in shipments helped to cover for a sharp slowdown in Turkey’s domestic Group I base oils production.

High prices for supplies from the domestic producer added to the attraction of covering requirements with imports instead.

The price gap was even larger for supplies of Russian origin.

Imports of 11,390t from Russia in October almost doubled from less than 6,000t the previous month to the highest since first-half 2016.

The surge in shipments lifted total imports from Russia to 64,120t in the first ten months of the year. The volume was up more than 50pc from around 40,000t during the same period last year.

The average price for the October supplies came to around $1,150/t.

The price compared with an average of around $1,470/t for close to 3,000t of October supplies of Polish origin and around $1,490/t for close to 2,000t of supplies originating from Saudi Arabia.

The competitive prices cut demand for supplies from more regular sources in the Mediterranean region.

Imports of less than 3,800t from Greece, Italy and Spain combined were the second lowest from those markets in more than a decade. The lowest had been in August.

The trend highlighted the structural shift in trade flows as Russian shipments displaced European supplies in the Turkish market.

More shipments from Europe in turn moved to markets like the Netherlands, helping to cover for the drop in supplies from Russia.

The consequence was lower prices for Group I supplies for buyers in Turkey, steeply discounted prices for supplies of Russian origin, and higher prices for European Group I supplies for buyers in Europe.