What a difference a day makes -or in this case a year. In the world of base oils, 2008 will go down as exceptional, to say the least. Not only was demand feverish amid snug supply conditions for most of the year, but posted prices rose to historic highs. Exacerbating the situation, two facilities in the United States closed permanently and the Gulf Coast region endured a destructive hurricane season that caused serious damage to some large base oil plants. Despite 2008's overall strong sales and beefy margins, the tide has turned, and the start of the New Year is not looking very rosy. Although most Decembers are slow in terms of activity, and base oil producers at year end typically have surplus grades to offer at attractive prices, this past month may prove to be one of the more difficult. Demand trailed off dramatically for most grades. Most players attributed the abrupt drop-off in buying to the failing global economy, which has made a huge negative impact in virtually all business segments that one can name.
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