Adaptive Strategies Ensure Stable Base Oil Prices in Germany During October 2024

The European Base Oil market in Germany has exhibited remarkable stability over the past four months, defying a series of disruptions that would have otherwise sent prices into an upward trajectory. Despite the confluence of geopolitical tensions in the Middle East, extreme weather events across Europe, and supply chain challenges stemming from hurricanes and port strikes in the United States, the Base Oil market has maintained a delicate balance between supply and demand during October 2024 which kept the Base Oil prices unchanged in Germany.

During October 2024, the Base Oil prices in Germany held their stability despite shipping issues due to the European market's ability to adapt to changing circumstances. While disruptions have undoubtedly impacted certain aspects of the market, overall availability has remained sufficient to meet demand. Businesses have demonstrated a remarkable degree of resilience, adjusting their operations to mitigate the effects of supply chain disruptions and ensuring a continuous flow of essential products. Despite the injection of imported cargo, supplies of Base Oils in Europe have remained relatively tight due to a combination of plant shutdowns and outages. Exports from regions such as the United States have declined significantly, limiting external sources of supply. In response, some European companies have strategically shifted their focus from importing Base Oils and additives to importing finished products, streamlining their supply chains and reducing their exposure to potential risks.

However, ExxonMobil's timely intervention has eased supply pressures and maintained market stability. By releasing inventory to offset the impact of a fire at the Agioi refinery, ExxonMobil has helped to ensure that essential supplies remain available for Base Oil. While trading activity has picked up, suppliers have resorted to offering temporary volume allowances and discounted prices to clear their inventories. Moreover, the anticipated demand spike for the fourth quarter has not materialized in Europe, largely due to a combination of economic slowdown and rising energy costs. This subdued demand growth has contributed to stable price levels, preventing a significant upward pressure to settle at USD 1443/MT Base Oil II H 500 FD, Hamburg, Germany on 18th October 2024.

As per ChemAnalyst, the Base Oil prices in Germany are expected to showcase an uptrend during November 2024 on the back of foreseen revived demand from the downstream lubricants industry. Tight supplies of the finished goods are anticipated, prompting the manufacturers to upward price adjustments amid the Red Sea attacks could disrupt the delivery times leading to higher costs of Base Oil during this timeframe.