Asia Base Oil Price Report


Base oil demand has cooled slightly in Asia, allowing for more volumes to become available for export. Suppliers have been exploring the possibility of shipping product to regional outlets, as well as more distant destinations in the Americas and Europe. Steep crude oil and feedstock prices, together with the need to improve base oil margins in view of competition from the fuels side placed pressure on current price indications, but there were no significant adjustments during the week.

Concerns about inflation, the war in Ukraine – which placed pressure on crude oil and fuel prices – and a possible worldwide recession were heard to be impacting industrial and automotive production, with consumers becoming more conservative in terms of spending. The steady climb of gasoline and diesel prices was also impacting activities in many countries. In some, the summer season led to more vehicles on the road and the resulting increase in fuel and lubricant consumption. In others, severe weather, lingering pandemic effects and economic woes were placing a damper on demand.

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This last scenario appeared to apply in India, where some parts of the country and of Bangladesh were experiencing severe floods caused by the monsoon and daily activities have ground to a halt. However, in other parts of India, base oil demand was said to be robust as blenders continued to manufacture finished lubricants to meet thriving demand, although most buyers preferred not to carry high inventories. The lighter grades continued to be the most sought-after.

The current turnaround at an API Group II base oil plant in India tightened domestic availability of products, but any shortages were made up by regional imports. Most Indian consumers were relying mainly on volumes acquired through term contracts, although a few ventured into the spot market. However, buyers’ ideas were far apart from sellers’ price expectations, and a few suppliers opted for offering their cargoes elsewhere.

Even so, several cargoes were expected to arrive in India from South Korea, Taiwan and Southeast Asia. A 3,500-metric ton cargo was expected to be shipped from Singapore to Mumbai this week. About 18,000 metric tons were shipped from Onsan, South Korea, to Mumbai in early June. A 4,000-metric ton lot was heard concluded from Pyeongtaek, South Korea, to Mumbai earlier this month as well. A large shipment of Taiwanese Group II base oils was also anticipated to be lifted in July for shipment to India, despite elevated freight rates.

South Korean suppliers had hoped to ship a few cargoes to destinations in the Americas, but it was heard that a lack of vessel space and steep freight rates were hampering business. A couple of transactions managed to be concluded, however, and some Taiwanese Group II and South Korean base oils were expected to move to Latin America.

In China, there were new lockdowns and restrictions imposed in several areas, resulting in subdued activity and movement of the population. This has led to a slump in base oil consumption, both for automotive, as well as for industrial applications. Domestic production of base oils was deemed sufficient to cover requirements for the time being, and some Chinese cargoes were even offered on the export market as supply was lengthening. An 8,000-metric ton parcel was discussed for shipment from Shanghai to Singapore and Merak, Indonesia, in mid-June.

At least three naphthenic base oil plants were shut down for maintenance in China in June, but two were anticipated to restart at the end of the month, and one was slated to complete a turnaround this month. 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.

Spot base oil prices in Asia were largely stable this week, although one range underwent small upward adjustments on tighter supply. 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 was holding at $1,090/t-$1,130/t, and the SN500 was unchanged 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 were also stable to slightly higher. The 4 centiStoke was assessed at $1,650-$1,690/t, and the 6 cSt was steady at $1,630/t-$1,670/t. The 8 cSt grade was up by $10/t at the top end of the range at $1,360-1,400/t, FOB Asia, all for fully approved product.

Upstream, crude oil futures slipped on Thursday on concerns about a possible recession and falling demand. Following an OPEC+ meeting this week, the organization confirmed it would only increase output in August as previously announced despite tight global supplies but created uncertainty about future output by not discussing plans for September, Reuters reported.

On June 30, Brent August futures were trading at $114.41 per barrel on the London-based ICE Futures Europe exchange, from $111.79/bbl on June 23. A year ago, Brent was trading at around $70/bbl.

Dubai front month crude oil (Platts) financial futures for August settled at $104.03/bbl on the CME on June 29, from $104.14/bbl for July futures on June 22.

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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