Asia Base Oil Price Report


The subdued trading pace in Asia sharply contrasted the more feverish activity observed at the same time last year and the first half of this year. This was partly attributed to the increased availability of most base oil grades, which had been fairly tight up until mid-year as several plants returned to production following turnarounds and refineries increased run rates on improved fuel demand.

Another factor that had a dampening effect on business was the uncertainty surrounding the pandemic – with the Omicron variant now present in many countries and cases on the rise, there was a sense that new restrictions and more muted activity would result in softer fuels and lubricants demand.

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There was also the typical thrust to lower inventories at the end of the year to avoid tax repercussions, which served as an incentive for suppliers to reduce spot offers and for buyers to limit purchase volumes and seek lower prices. From most indications, however, spot prices were close to bottoming out.

Aside from plentiful regional supply, there were reports of several cargoes from the United States and the Middle East that were due to arrive in India over the next few weeks, and a number of additional U.S. parcels were also being discussed for shipment this month. It was heard that U.S. suppliers had been able to place these cargoes into the export market to attain more balanced inventory levels and had offered the product at attractive pricing. Spanish and Middle East light grades were also heard to be on their way to India.

Indian demand for light grades has remained fairly steady, even with many of the uncertainties plaguing the market. Lubricant consumption has stabilized after several months of lackluster performance and there were signs of an economic recovery in the country. However, certain indicators such as automotive sales have been somewhat disappointing.

Passenger car sales in India plummeted to the lowest in several years in November, according to statistics from the Society of Indian Automobile Manufacturers. Rajesh Menon, director general, SIAM, noted in a December press release that the industry “continues to face headwinds due to a global semi-conductor shortage. In the festive season, the industry was hoping to make up for the lost ground, but sales in the month of November 2021 were the lowest in 7 years for passenger vehicles, lowest in 11 years for two-wheelers and lowest in 19 years for three-wheelers. Amidst the rising threat of Omicron […], the industry is pro-actively ensuring employee safety and monitoring any supply chain hiccups.”

Aside from U.S. cargoes reaching India, there were reports of Middle Eastern, European and Taiwanese material moving to the country in December as well. The plentiful availability of imports, coupled with stable supply from domestic producers allowed Indian buyers to assume a fairly comfortable position, without the pressure to accept the first offer that came their way. At the same time, recent international transportation and logistics issues were enough to convince some consumers that securing local cargoes was more of a sure bet, rather than having to wait for products that had to move halfway across the world.

Taiwanese supplies have increased since November as the sole API Group II producer in Taiwan restarted its plant in late October, following an extended turnaround. The supplier was able to offer more cargoes into the region, with China in particular being one of the beneficiaries of the increased availability.

Chinese buyers have been hesitant to secure import cargoes – with the exception, perhaps, of Taiwanese shipments – as they were hoping prices would continue to soften. Domestic prices in China have been on a downward trend for weeks and this seemed to encourage buyers to hold off on purchases for as long as possible. Demand for heavy grades has been seasonally low in any case, particularly for Group I bright stock, and buying appetite for the light grades has not been particularly strong. There continued to be steady interest for Group III grades, with a local coal-to-liquids plant in China expected to start a turnaround this month.

A partial shutdown at a South Korean Group II and Group III plant due to a technical issue appeared to be affecting only the production of the Group II 600 neutral cut. It was heard that the production train would be running at reduced rates from October until the end of December. In general, South Korean Group II and III producers’ positions were fairly balanced and there was less pressure to place product into the spot market. There was talk of potential shipments to Latin America as well.

Group III supplies were expected to remain fairly tight into the first half of 2022, particularly for the 4 centiStoke grade, as many automotive lubricant manufacturers were keen on using this cut for engine oil and synthetic lubricant blending.

Group I exports from Southeast Asian producers, including from Singapore, have been less evident in recent weeks than earlier in the year, when product shortages had given way to bidding wars among regional buyers. It was heard that some December cargoes of Group I products were still available.

Spot base oil prices were steady to soft week on week, with the heavy grades displaying the most significant downward adjustments. The spot ranges portrayed below have been revised to reflect bids and offers, deals and published prices widely regarded as benchmarks for the region.

Ex-tank Singapore prices were stable to lower on ample supply and lackluster buying interest. The Group I solvent neutral 150 grade was steady at $840/t-$870/t, and the SN500 was also unchanged at $1,010/t-$1,050/t. Bright stock was assessed down by $20/t at $1,220/t-$1,260/t, all ex-tank Singapore.

Prices for the Group II 150 neutral edged down by $20/t to $870/t-$910/t, while the 500N dropped by $40/t to $1,140/t-$1,180/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 slipped by $20/t to $730/t-$770/t, and the SN500 was down by $10/t at $870/t-$910/t. Bright stock’s assessments dropped by $40/t to $1,020/t-1,060/t, FOB Asia.

The Group II 150N was heard to have moved down by $10/t to $770/t-$810/t FOB Asia, but the 500N and 600N cuts were down by $30/t at $900/t-$940/t, FOB Asia.

In the Group III segment, prices were stable to soft, with the 8 cSt edging down on weaker fundamentals. The 4 centiStoke was holding at $1,440-$1,480/t, and the 6 cSt was assessed at $1,420/t-$1,460/t. The 8 cSt grade was lower by $10/t at $1,180-$1,220/t, FOB Asia, all for fully approved product.

Upstream, crude oil futures strengthened on Thursday as U.S. crude inventories were lower than expected due to a pickup in fuel demand despite concerns about the omicron variant and a rise in daily COVID-19 cases in many countries, including the U.S. An upbeat U.S. Federal Reserve report outweighed those concerns as well.

On Dec. 16, Brent February futures were trading at $74.60 per barrel on the London-based ICE Futures Europe exchange, from $75.16/bbl on Dec. 9.

Dubai front month crude oil (Platts) financial futures for January settled at $71.52/bbl on the CME on Dec. 15, from $73.46/bbl on Dec. 8. (CME note: Settlement prices on instruments without open interest or volume are provided for web users only and are not based on market activity.)

Gabriela Wheeler can be reached directly at 

Lubes’n’Greases shall not be liable for commercial decisions based on the contents of this report.

Archived base oil price reports can be found through this link:

Historic and current base oil pricing data are available for purchase in Excel format.

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