HOUSTON – China is the land of the rising base oil demand, according to Joe Rousmaniere, head of Petronas base oil business. China was a net exporter of base oils not many years ago, he said, but now imports 30 million gallons (about 714,000 barrels) per month. Rousmaniere joined a panel of speakers here Nov. 10 at the International Lubricants and Waxes Meeting held by the National Petrochemical and Refiners Association.
Rousmaniere said theres a big change from monogrades to multigrade motor oils in the region. Major OEMs, especially Japanese car companies, are leading the move to high-quality motor oils, he said. The shortage of base oils in the Far East will continue. But in 2008 new Group II and III plants will begin to come on line. That will have a big impact worldwide.
Petronas, Malaysias national oil company, expects to open a 6,500 barrels-per-day Group III plant in mid-2008. The company held a groundbreaking for the plant in September.
A China base oil data report for January to August 2006 put together by Petronas found that China imported about 824,000 metric tons of base oil from a variety of different countries. Among the largest suppliers of base oil to China:
- Singapore, 37 percent (300,000 metric tons)
- Republic of Korea, 15 percent (123,000 tons)
- Japan, 12 percent (100,000 tons)
- Russia, 11 percent (91,000 tons)
- Taiwan, 9 percent (72,000 tons)
Petronas study found that the top Chinese importers in terms of imported volume from January through August included:
- ExxonMobil, 16 percent (129,000 metric tons)
- Shell, 9 percent (71,000 tons)
- BP, 7 percent (58,000 tons)
- Sinopec, 7 percent (54,000 tons)
- Feoso, 6 percent (52,000 tons)
In terms of imported volume of base oil, the busiest port in China during the same time frame was Nanjing, with 280,000 metric tons, followed by Tianjin (219,000 tons) and Shenzhen (82,000 tons).
Posted paraffinic base oil prices are unchanged in the United States this week. Crude closed at $60.96 per barrel yesterday on the New York Mercantile Exchange, according to Bloomberg. That was 87 cents above the price a week ago.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.