Asia Base Oil Price Report


Falling crude oil values and ebbing demand were placing downward pressure on base oil prices, with spot indications for a number of grades seeing downward adjustments. The lower crude oil values do not translate into reduced base oil prices overnight, but they do impact market sentiment, with buyers holding back on purchases as they waited for the recent upstream developments to play out.

Crude oil values have tumbled from levels observed in early October, following the Hamas attack on Israel. That month, the average price of one barrel of Brent crude oil was $90.78, according to, but prices have plunged to the low- to mid-$70s per barrel since then, despite efforts by OPEC+ to stabilize prices by deepening and extending its production cuts. According to analysts, global macroeconomic factors, discussions at the COP28 climate conference calling for a formal phase-out of fossil fuels, and lackluster economic forecasts for China fueled concerns about crude oil demand in 2024.

On Thursday, Dec. 7, crude oil futures dropped to a six-month low on a weak outlook for the world’s largest economies and booming United States oil production and exports. Brent February 2024 crude futures were trading at $74.44 per barrel on the London-based ICE Futures Europe exchange on Dec. 7, from $82.83/bbl on Nov. 30.

Dubai front month crude oil (Platts) financial futures for January 2024 settled at $74.34 per barrel on the CME on Dec. 6, from $82.71/bbl on Nov. 29.

Base oil and lubricants demand has slowed down in most of Asia as is typical during the last weeks of the year, when consumers try to reduce inventories to avoid tax implications on existing stocks or purchase just enough to run daily operations. Additionally, buyers preferred to wait as long as possible to secure additional volumes given falling crude oil and feedstock prices, which were expected to exert downward pressure on base oil indications. At the same time, suppliers strive to place product before the end of the year to lower inventories as well, and often decrease spot prices as an incentive for buyers to secure volumes beyond those specified in term contracts.

Supplies have grown not only because of slowing demand in Asia, but also because of refineries running at high rates, given advantageous base oil margins, and the completion of turnarounds in the regions.

API Group I availability remained tight compared to other grades given healthy domestic demand in countries that produce these base stocks and recent plant shutdowns. Spot prices have therefore been partly isolated from the downward pressure seen on other base oil grades. Bright stock in particular seemed to enjoy a privileged position as supplies were snug and consumption was robust, allowing for prices to be maintained.

Supplies of all grades in Southeast Asia were generally deemed balanced-to-tight against demand, with several cargoes anticipated to be shipped into destinations within the region this month. A 2,750-metric ton cargo was discussed for prompt shipment from Singapore to Taicang, China, and a 1,000-ton lot was on the table for shipment from Singapore to Manila, Philippines, in the second half of Dec. A 1,000-ton parcel was mentioned for prompt shipment from Sriracha, Thailand, to Nantong, China. About 9,300 tons were discussed for lifting in Singapore to Taicang, as well as Kobe and Kawasaki, Japan, and Ulsan, South Korea, in mid Dec.

At the same time, a number of South Korean cargoes were quoted for shipment to Southeast Asia and beyond, with a 2,000-ton parcel mentioned for shipment from Yeosu to Tanjung Priok, Indonesia, in late Dec. or early January, and about 3,000 tons made up of three grades also discussed for shipment from Yeosu to Merak, Indonesia, on similar dates. A 6,000-ton cargo was expected to be shipped from Daesan to Savannah, U.S., this month as well.

Japanese refiner Eneos decommissioned its Group I plant in Wakayama permanently in mid-October. The producer also conducted a maintenance program at its Mizushima A Group I plant from September until earlier this week.

Aside from exports from Japan seeing an almost 20% drop during most of the year compared to 2022 due to turnarounds, permanent plant closures, and the need to fulfill domestic requirements, the country has had to increase imports to meet domestic demand for base oils as well. Nevertheless, there was mention of a 2,350-ton cargo for prompt shipment from Yokohama to Zhenjiang, China, this week.

Perhaps it is the Group II segment that witnessed the largest downward price adjustments. There was growing pressure on prices because of lengthening regional supplies, particularly as the Taiwanese Group II producer, Formosa Petrochemical, was expected to restart its plant in Mailiao in the next few days, following a two-month turnaround. The producer had met most contract commitments during the turnaround but had restricted spot sales and shipments to China. However, the company was anticipated to start offering spot cargoes this month, although buying interest from China was anticipated to be sluggish and this might result in the supplier offering cargoes to alternative destinations instead. There was talk of a 2,500-ton to 3,000-ton Taiwanese cargo moving to the United Arab Emirates in second half December. A 3,500-ton parcel was also expected to be shipped from Mailiao to Singapore in the second half of December.

China’s demand for imports has steadily declined during the year as domestic production has increased, and importers have been focusing on placing those volumes they currently hold before securing fresh cargoes. Refiners had also been prioritizing base oils output over gasoil production given attractive margins. Group I demand remained generally steady due to increased industrial activity and robust consumption from the marine lubricants segment, but Group II supplies have started to grow long despite reduced imports from Taiwan because of slowing demand and plentiful domestic availability. Group III supply and demand were deemed fairly balanced and prices were stable to slightly lower, with a local producer heard to be gaining market share.

There has also been steady import activity of Group II grades in India, but not involving as many regional cargoes as expected. A number of U.S. base oil cargoes have been secured given attractive prices, and they were expected to arrive in the coming weeks. This was partly prompted by the need of U.S. suppliers to lower domestic inventories at the end of the year, and by reduced U.S. export volumes to Mexico because of new import restrictions imposed on most refined products by the Mexican government.

The additional Group II availability, coupled with plentiful domestic supplies of Group I, have exerted downward pressure on Group I prices in India as some end-users are able to use Group II grades instead of Group I in certain applications, and Group II prices have been more competitive. Group I CFR India prices have slipped by approximately $20 per metric ton, with the exception of bright stock, which has been steady to lower by $10/ton.

Aside from increased Group II imports from the U.S., Indian buyers expected to see fresh offers from Taiwan as Formosa Petrochemical was expected to have completed its turnaround. Group II bids and offers have seen downward adjustments of about $20/ton from the previous week.

Group III prices in India have also come under pressure as sellers look for opportunities to place cargoes there as demand in the U.S. and Europe has weakened. Group III grades, with the exception perhaps of the 8 centiStoke, were heard to have fallen by $20/ton-$25/ton week on week.

Some of the Group II supply overhang might be offset by reduced production rates at South Korean Group II producer Hyundai Oilbank-Shell’s during most of November and efforts by Malaysian Group II and Group III producer Petronas to start padding its inventories ahead of an extended turnaround in January.

Group III grades were deemed plentiful on a global scale as most plants in Asia and the Middle East were running well, and requirements have declined due to seasonal patterns.

SK Enmove plans to shut down its Group III base oil units in Ulsan in March for a month-long turnaround, with spot availability expected to be reduced as the producer will likely build inventories ahead of the shutdown, according to sources.

Base oil spot price assessments were mixed again in Asia this week, depending on supply and demand factors and margin pressure from volatile feedstock values. The price ranges portrayed below reflect discussions, bids and offers, as well as deals and published prices widely regarded as benchmarks for the region.

Ex-tank Singapore prices were steady to slightly higher from the previous week. The Group I solvent neutral 150 grade was up by $10/t at $870/t-$910/t, and the SN500 was assessed steady at $990/t-$1,020/t. Bright stock was holding at $1,180/t-$1,220/t, all ex-tank Singapore.

Prices for the Group II 150 neutral were lower by $20/t at $990/t-$1,020/t, and the 500N slipped by $10/t to $1,030/t-$1,070/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was unchanged at $800/t-$840/t, and the SN500 was hovering at $900/t-$930/t. Bright stock prices were steady at $1,000/t-1,040/t, FOB Asia.

The Group II 150N fell by $40/t to $820/t-$850/t FOB Asia, and the 500N by $50/t to $830/t-$860/t FOB Asia.

In the Group III segment, 4 cSt, 6 cSt and 8 cSt prices were assessed steady-to-lower compared to the previous week. The 4 cSt was assessed down by $20/t at $1,230-$1,260/t, and the 6 cSt was also adjusted down by $20/t to $1,200/t-$1,240/t. The 8 cSt grade was steady at $940-$980/t. All indications are FOB Asia for fully approved product.

Gabriela Wheeler can be reached directly at 

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