Tupras to offer base oils, bitumen next week

Turkish refiner Tupras restarted its 227,000 b/d Izmir refinery this week and is ramping up production after an eight-week halt for maintenance.

Domestic buyers are expecting new supplies of base oils to be offered as soon as the middle of next week. Domestic truck offers of pen 50/70 bitumen are expected from tomorrow, with pen 100/150 sales to commence next Wednesday, 10 March.

The timely restart of Turkey's only Group I base oil unit is welcomed by domestic lubricant blenders who have been struggling to secure enough supply to cover their requirements. The returning production would help alleviate some of the current supply tightness in the Turkish market.

But lower transport fuel margins could keep a lid on Izmir refinery utilisation, impacting the availability of feedstock for base oil and bitumen production. The availability of supplies from the producer and the impact on domestic prices in the coming weeks remains uncertain.

This week, the refiner increased its ex-tank prices for base oils for a second consecutive week. It increased SN 100, SN 150, SN 500 and bright stock by 260-320/t lira ($34.40-42.38/t) depending on the grade, following a TL440-475/t increase last week. The pace of the increase has lagged the rise in European and Russian export prices in recent weeks, making that arbitrage less feasible. Some buyers are hesitant to commit to import cargoes until the impact of Tupras' restart on supply and prices is more certain.

It is unclear if Tupras has started offering bitumen cargoes to the export market following the restart. Tupras has reported that it produced a total of 3.1mn t of bitumen at its four Turkish refineries last year, exporting 700,000t of it. According to Vortexa shipping data, 450,000t of bitumen was exported in cargoes from Izmir in 2020, while 220,000t of cargo flows were shipped to export markets from Tupras' Izmit refinery and terminal complex.

By Clara Toellner and Keyvan Hedvat