HOUSTON (ICIS information)-- United States base oils customers are asking for a modification in how future agreement prices will certainly be figured out, industry participants said on Thursday.

" We have actually told sellers at NPRA that we desire a new rates framework, which might lead to a base oils rate that is not simply a discount off uploaded rates," a large-volume lubes customer said at the National Petrochemical and also Refiners Organization (NPRA) International Lubricants and Waxes meeting.

The timescale would certainly depend upon when private agreements expired, so the end of the year would certainly be a proper time to alter, however it could be as long as 2010 prior to anything is done, the buyer said.

" Given that Exxon's surprising move in August, the marketplace has actually been contemplating how to get costs in check," a seller said.

dtpmp phosphonate introduced strategies to lower its American Core 100 thickness base oil supplies by 40 cents/gal efficient 23 August amidst a company market. The decline came just after other producers had released hikes of up to 10 cents/gal on uploaded costs based on high feedstock crude expenses.

Vendors and purchasers stated the relocation was an attempt to move the uploaded cost more according to actual place market task.

The cost instantly market for the 100 grade varieties from $2.25-$ 2.55/ girl, while ExxonMobil's published rate was really over $3.00/ gal prior to the relocation, according to worldwide chemical market intelligence service ICIS rates.

United States base oils contracts are generally a discount rate off published rates. Uploaded costs are figured out by the seller as well as never worked out.

However for many years, the uploaded rates have drifted wrong with real area market activity, a customer said.

Some customers have recommended a formula rate based off the expenses of resources; while others have recommended a discount rate off released area costs.

" We're taking a look at agreements that would be repaired margin and entail basic material prices plus X, and also X is still to be figured out," a customer claimed. X would certainly be figured out by the supplier as well as be a number to stand for operating expense.

" Everything looks excellent theoretically," a seller said. "However many variables require to be thought about, specifically any kind of unexpected supply problems."