Asia Base Oil Price Report


Several factors continued to exert pressure on spot base oil pricing in Asia, but some prices stabilized, while others showed only moderate increases compared to last month when values reflected significant jumps. Steep crude oil and feedstock prices on the back of international sanctions on Russian exports and steady demand from most segments lent support to the current price indications, although some countries were showing a slowdown in requirements.

Buyers and sellers watched crude oil and fuel prices with concern, as the rising price of diesel and other fuels and strained supplies were influencing refiners’ allocation of feedstocks. In some cases, more feedstocks were streamed for fuel production, taking them away from base oils output due to better margins and shortages. This was particularly true in some parts of India. This had resulted in a tightening of base stock supply at some refineries. Base oil managers and sellers were therefore anxious to raise values in order to support steady production.

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Keen interest on Asian base oil exports from India and more distant destinations in Europe and the Americas also contributed to a tighter spot supply scenario, as several cargoes moved from Northeast Asia in recent weeks. These outlets offered producers the opportunity to sell their extra barrels at advantageous prices and avoid bulging inventories.

A few cargoes were discussed this week for shipment from South Korea to Latin America. About 11,000 metric tons were mentioned for prompt shipment from South Korea to Ecuador. A 3,000-metric ton parcel was in discussions for lifting from Ulsan to Callao, Peru, in the second half of June or early July.

Several South Korean cargoes and at least one Taiwanese parcel were also expected to move to Southeast Asia. About 7,200 metric tons were on the table to be shipped from Yeosu and Onsan to Koh Sichang, Thailand, in mid-July. About 2,000 metric tons might be shipped from Ulsan to Singapore in the second half of July. Close to 5,000 metric tons were also discussed for lifting in Daesan for Singapore and Port Klang, Malaysia, in the second half of July. A 2,000 metric-ton cargo was also discussed for Yeosu to Manila, Philippines, in the first half of July. A 3,000-metric ton parcel was likely to be shipped from Mailiao, Taiwan, to Singapore and Port Klang at the end of June/early July. Within the region, a 2,000-metric ton cargo was heard to be on the table from Rayong, Thailand, to Port Klang, Malaysia, in July.

Indian buyers were trying to use up existing inventories as there were uncertainties related to activity in downstream markets. With the start of the monsoon season and potential flooding, driving and transportation sees many disruptions and lubricant business tends to slow down. At the same time, a few buyers preferred to be well-supplied in case of problems obtaining deliveries in coming weeks and have padded inventories ahead of the heavy rains. An upcoming turnaround at a domestic Group II base oil facility was also expected to result in tighter supplies. The sudden interest in base oils has boosted price ideas in India.

In China, demand was characterized as softer than expected for this time of the year due to ongoing pandemic-related lockdowns and restrictions. Importers were cautious about securing cargoes at the current spot levels as they wanted to avoid the risk that values would soften by the time those parcels arrived.

Nevertheless, South Korean and Taiwanese cargoes continued to move to China, with 2,300 metric tons expected to be shipped from Onsan to Huizhou in late July. A 2,000-metric ton lot was discussed from Rayong, Thailand, to Nantong in early July. About 3,000 metric tons of three base oil grades were on the table from Hong Kong to Zhapu, China, in mid-July.

Domestic supply was deemed sufficient to cover requirements, but China always suffers from a deficit of heavy-viscosity grades such as bright stock, so buyers often buy cargoes from Southeast Asia. There were a number of bright stock cargoes offered by Southeast Asian and Japanese producers for July lifting. However, Southeast Asian buyers appeared more willing to pay the current price levels and seemed to be able to secure base stock parcels more easily than their Chinese counterparts, as proximity and logistics also worked in their favor.

At least three naphthenic base oil plants remained shut down in China this month, but two were anticipated to restart at the end of the month, and one was slated to complete a turnaround in July. Some paraffinic plants were heard to be running at reduced rates due to high feedstock costs and concerns that current domestic consumption would not absorb the volumes being produced.

As mentioned above, spot base oil prices in Asia were largely stable this week, although a couple of ranges underwent small upward adjustments on higher buying and selling indications. The ranges portrayed below reflect bids and offers, as well as deals and published prices widely regarded as benchmarks for the region.

Ex-tank Singapore prices were stable, with spot prices for the Group I solvent neutral 150 grade assessed at $1,170/t-$1,200/t, and the SN500 at $1,360/t-$1,400/t. Bright stock was holding at $1,470/t-$1,510/t, all ex-tank Singapore.

Prices for the Group II 150 neutral were assessed at $1,310/t-$1,350/t, while the 500N was holding at $1,380/t-$1,420/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 moved up by $10/t to $1,090/t-$1,130/t, and the SN500 was up by $20/t at $1,250/t-$1,290/t. Bright stock was steady at $1,330/t-1,380/t, FOB Asia.

The Group II 150N was holding at $1,270/t-$1,310/t FOB Asia, and the 500N and 600N cuts assessed unchanged at $1,320/t-$1,370/t, FOB Asia.

In the Group III segment, prices moved up slightly. The 4 centiStoke was assessed up by $20/t at $1,650-$1,690/t, and the 6 cSt was up by $10/t at $1,630/t-$1,670/t. Similarly, the 8 cSt grade inched up by $10/t to $1,360-1,390/t, FOB Asia, all for fully approved product.

Upstream, crude oil futures were hovering at steep levels compared to a year ago, but have come down from their highs earlier this month. Oil prices climbed on Thursday after moving down on Wednesday as investors weighed the risks of a recession and assessed fuel demand on the back of rising interest rates and tighter supplies.

On June 23, Brent August futures were trading at $111.79 per barrel on the London-based ICE Futures Europe exchange, from $116.43/bbl on June 16. A year ago, Brent was trading at around $70/bbl.

Dubai front month crude oil (Platts) financial futures for July settled at $104.14/bbl on the CME on June 22, from $109.99/bbl on June 15.

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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