While a majority of July spot deals had been finalized at prices similar to June business, suppliers welcomed the Singapore refiners initiative as margins have been squeezed by climbing crude oil and feedstock prices, and the refiners move was an added incentive to implement similar measures. However, producers maintained a fairly cautious attitude and preferred to check their competitors selling ideas.

A northeast Asian supplier said that it had attempted to lift the price of a small Group III cargo moving to Southeast Asia in early August, but had finally acquiesced to the buyers indication and had finalized the transaction at similar levels to those seen in July. However, the supplier said that this was partly because Group III supplies were comparatively more plentiful than those in Group I and II.

Despite the slightly long supply, participants said that prices for Group III grades had managed to inch up by about $10/ton since early July. The latest spot ranges were assessed at $1,000-$1,060/t FOB Asia for 4 centiStoke, 6 cSt and 8 cSt cuts, reflecting a $10/ton increase at the high end of the spread from the previous week.

Within the Group I, numbers were mentioned at $960-$980/t FOB Asia for solvent neutral 150, $1010-$1040/t FOB for SN500 and $1110-$1150/t FOB for bright stock.

Group II material was assessed at $980-$1040/t FOB northeast Asia for 150N and at $1070-$1120/t FOB northeast Asia for 500N.

Group I ex-tank Singapore ranges were heard near $1030-$1100/ton for SN150, $1080-$1180/t for SN500 and $1180-$1290/t for bright stock this week. Prices have moved up on the back of ex-tank price increases by a major refiner, and varied according to volumes and other contract stipulations.

Meanwhile, in China, Hainan Handi shut down its facilities in early July for a turnaround, which sources said should last about 45 days, instead of the previously reported three months.

Taiwanese producer Formosa Petrochemical Corp. was expected to ship less material to China next month because its Group II plant will be undergoing a turnaround in August and September. The supplier has built inventories to cover some of its contractual obligations, but shipments to China could see a reduction of about 25 percent in August compared to July, sources said.

South Korean producer SK Lubricants is not likely to be able to offer any Group II spot cargoes to China in August either, as the supplier reported tight supply and is prioritizing term commitments.

Turnarounds in Korea and Taiwan, together with domestic supply reductions, have resulted in a snug market scenario in China. This, coupled with steeper gasoil prices, has led to higher base oil selling indications, especially for the Group II high viscosity grades, which appear to be in short supply. A Korean cargo of 600N was heard on offer at $1,200/ton CFR China, but buyers considered the price to be too high, and no deals have been heard at this level yet. Domestic offers for 500N have moved up and were hovering at CNY (Chinese Yuan) 10,500/ton EXW (ex-works), with some deals reported around this level, according to sources.

In India, demand has slowed down because of the monsoons and the flooding in some areas of the country, which has posed logistical difficulties for product transportation. A number of U.S. cargoes are expected to arrive into India during August, with some Group II heavy cuts heard to have been booked and some Group III from other origins also expected to reach Indian shores in the next few weeks. The volumes of Korean product shipped to India dwindled in July because of turnarounds at Korean facilities, but should return to normal levels in September. Despite rumblings that regional suppliers would like to push increases through in August, buyers said they were not prepared to pay higher prices than in July. Buying interest for local product has seen a boost because of attractive pricing from domestic suppliers, sources in India added.

On the shipping front, brisk activity was noted again this week, with at least two cargoes expected to load in Japan in August. Ship operators were working on 1,000 metric tons of base oil to be shipped from Chiba to Nantong or Tianjin in the second half of August, while there was an inquiry for 2,500 tons likely to move from Kawasaki to Nantong or Tianjin during Aug. 20-31.

In South Korea, a 1,000-metric ton cargo of two grades was being worked on for shipment from Onsan to Wakayama and Tsurumi for Aug. 9-13 loading. A 2,500-ton lot of three grades was discussed for Ulsan or Yosu to Merak, Indonesia, for delivery during Aug. 19-31. A 2,000-ton parcel was looking to be moved from Yosu to Nantong in first half of August. A second 4,950-ton cargo comprised of four grades was expected to be shipped from Yosu to Mumbai during Aug. 20-25. Additionally, a two-grade, 700-ton lot was expected to move from Onsan to Singapore during Aug. 12-20, while 1,100 tons were being discussed for Onsan to Yokohama for Aug. 14-19 lifting. In Europe, 2,000 tons of bright stock were in the market to cover Algeciras, Morocco, to Hamriyah, United Arab Emirates, during Aug. 15-25.

Upstream, September Brent settled in Asia at $107.18/bbl on July 30, compared to numbers at $107.92/bbl on July 23.

Gabriela Wheeler, based in Japan, can be reached directly at gabriela@lngpublishing.com.