Premiums for 50 ppm sulfur gasoil nudged up for the second straight trading day in Northwest Europe, tracking an uptick in the value of diesel, traders said.
But they added that key German demand for the product remains subdued because of the low water levels in the Rhine river.
On Thursday, Platts assessed 50 ppm at a $17.75/mt premium to the December ICE gasoil futures contract, up $0.50/mt on the day, following a $0.75/mt daily rise on Wednesday.
But traders said intraday trading activity was slow, with demand Germany from Germany being held back by the low Rhine levels, preventing fully laden barges from traveling along the river system.
"Just small volumes [travel] given water levels," one middle distillates trader said.
Rhine water levels were measured at just 54 cm Friday morning in Kaub, a key measuring point on the river.
"The Rhine is closed [for large volumes]. You don't buy something you cannot move," another middle distillates trader said.
Activity in the Platts Market On Close Assessment process was also subdued Thursday, with only NSG NL offering barges and Petrofina bidding, and no trades completed. Bids and offers were in a $17-20/mt spread for the front window.
In Wednesday's MOC process, there were no orders for the 50 ppm market, which traders said reflected the low demand.
Over the past two weeks, 50ppm barge differentials had been on a downward trend because of the low demand. But in the last two days, they have recovered as diesel has strengthened on the back of higher levels of demand in Germany, traders said. The market for 10 ppm sulfur material rose $0.75/mt on Thursday to a $22.25/mt premium to the December ICE gasoil contract.
"With diesel, where it's trading at, it only makes sense that 50 ppm isn't depressed," another trader added.
