US refiner Calumet Specialty Products Partners saw profit from its specialty products unit surge in the second quarter to its highest in years on the back of higher prices and strong demand.

The unit’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $123.5mn in the three months to end-June.

Profit rose almost fourfold from $31.8mn the same time a year earlier and from $28.1mn in the first three months of the year.

Profit rose on the back of strong demand that supported higher prices, combined with steady supply.

Base oils and lubricants production of 10,661 b/d in the second quarter was down from 10,765 b/d during the first three months of the year. It was up from 10,356 b/d during the same period a year earlier.

The unit’s sales surged even with the lower output compared with the first three months of the year.

Its revenue of $979.2mn in the second quarter rose by 80pc from year-earlier levels to the highest in at least three years.

The rise in profit was even larger, reflecting the refiner’s leverage to pass on the sharp rise in feedstock costs.

That leverage reflected strong base oils demand and limited surplus supply during the second quarter of the year.

Refiners’ ability to at least pass on higher costs has helped to sustain or boost their profit margins.

Calumet’s EBITDA margin from its specialty products unit rose to 12.6pc in the second quarter of the year. The margin was up from 3.7pc in the first quarter and the highest in more than a year.

Firmer profit margins contrasted with many lube blenders’ increasingly squeezed margins as they struggled to pass on a wave of rising costs.

Calumet’s total net loss of $15.3mn in the second quarter narrowed from a $78.4mn loss during the same period a year earlier.