Asia Base Oil Price Report


Base oil prices in Asia have softened on improved supply levels, cooling demand and lower crude oil and feedstock prices. The heated frenzy to acquire product witnessed earlier in the year – when availability was extremely tight – was chilled by refiners running plants at full rates, no major turnarounds taking place, and buyers becoming more cautious in terms of how much material to purchase.

At the first signs of a downward price revision, consumers generally prefer to delay purchases as long as possible to take advantage of lower prices and avoid being stuck with higher-priced inventories. Furthermore, given economic uncertainties and the threat of a global recession, many buyers preferred to use up existing inventories and wait until a clearer picture of what future demand might look like emerged. Most were relying on term shipments and abstained from participating in the spot market so as to avoid price risks.

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In the second half of the year, availability traditionally tends to lengthen, and prices edge down, and then strengthen again towards the beginning of the last quarter of the year – unless there are unexpected incidents like severe weather that might force base oil plants to shut down, or serious production issues in another region and Asian supplies are then required to fill the supply gaps. The monsoon season in India and Pakistan has dampened purchase levels as flooding and ensuing logistical issues have led to lackluster lubricants demand, and more spot barrels have become available in the market as a result.

Indian base oil consumption has remained healthier than expected, however, supporting current price indications, but the overall perception that the market was tilting towards an oversupplied position was encouraging buyers to present bids at lower levels for upcoming shipments. Suppliers appeared willing to match some of these numbers. Lower gasoil and other fuel prices also took the pressure off refiners to focus on distillates rather than base oil output, and domestic base oil availability was deemed plentiful.

There was availability of Taiwanese and South Korean material as well, but United States products were largely absent as prices seemed unworkable for the Indian market at the moment. This week, a 2,000 metric ton cargo was being discussed for shipment from Pyongtaek, South Korea, to West Coast India in August, and a similar cargo was also on the table for September. A 3,000-metric-ton parcel was mentioned for shipment from Yeosu or Ulsan to Mumbai in August. Another 4,000 metric tons were being worked on for lifting in Daesan or Pyongtaek to West Coast India this month.

The dampened buying appetite and lengthening supplies in Asia were aggravated by reduced consumption levels in the key market China. Chinese interest for base oil imports was languid, partly because of ongoing COVID-19-related restrictions and lockdowns in several major cities, hindering both industrial activity as well as the population’s mobility. Chinese lubricant manufacturers tried to meet demand by utilizing mostly domestic supplies, which were available at competitive values, leaving more base stock parcels available for export from Southeast and Northeast Asia. Furthermore, there were also Chinese Group I and Group II light grades that were offered in the market.

Some regional cargoes were offered to Vietnam, the Philippines, and other Southeast Asian destinations. A 2,000-metric-ton lot was in discussion for shipment from Yeosu, South Korea, to Manila in the first half of August, while about 5,000 metric tons were on the table from Yeosu to Vietnam in early September. A 4,000 metric ton cargo was mentioned for lifting in Dalian, China, to Singapore this month as well. About 1,000 metric tons were likely to be shipped from Singapore to Manila the first week of September.

The sole Taiwanese Group II producer was heard to be selling spot cargoes to India and the Middle East as demand from China has seen a sharp drop. China usually acquires a large portion of the producer’s output, but requirements have decreased. It was not clear whether political tensions between the two countries played any role in this situation.

Despite the fact that the heavier viscosity grades are generally in higher demand during the summer months in Asia, it appeared that a product overhang has prompted larger decreases for these grades, with bright stock in particular experiencing price cuts of around $30-$50 per metric ton. Chinese demand for this grade is weaker than in the past and the price of imports deemed too high. Some of the Group I grades were tighter than their Group II counterparts, and prices were therefore more sheltered from large decreases.

Most Group II base oils appeared readily available, and prices have succumbed to pressure, with downward adjustments for FOB indications as hefty as $60-80/t reported during the week for August transactions. The lower prices were meant to attract buying interest from distant receivers in markets such as the Americas. Around 7,000 metric tons were being quoted for shipment from Ulsan, South Korea, to the U.S. Gulf in 2H August. A 10,000 metric ton cargo was thought to have been booked from Ulsan, South Korea, to the Caribbean in late July to early August. A 3,000 metric ton parcel was mentioned for shipment from Rayong, Thailand, to Rio de Janeiro, Brazil, in early August.

Group III supply and demand were deemed more balanced, and prices have been less exposed to downward adjustments. Many of the high-performance base oils are more difficult to replace in certain applications and can therefore maintain a premium compared to Group I and Group II cuts.

The downward movement of crude oil and feedstock prices also contributed to a more bearish market sentiment in Asia. Crude oil futures plunged to six-month lows on Wednesday as OPEC+ agreed to increase its oil output target by 100,000 barrels per day, while a surprise build in U.S. crude and gasoline inventories exerted additional pressure.

On August 4, Brent October futures were trading at $96.27 per barrel on the London-based ICE Futures Europe exchange, from $107.84/bbl for September futures on July 28.

Dubai front month crude oil (Platts) financial futures for September settled at $92.14 per barrel on the CME on Aug. 3, compared to $99.26 for August futures on July 27.

Spot base oil prices in Asia were stable to softer this week on increased supply levels, weaker demand and lower feedstock prices. The 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 saw some downward adjustments compared to the previous week. Spot prices for the Group I solvent neutral 150 grade were heard at $1,170/t-$1,200/t, but the SN500 was lower by $20/t at $1,340/t-$1,380/t. Bright stock was assessed down by $30/t at $1,410/t-$1,450/t, all ex-tank Singapore.

Prices for the Group II 150 neutral were heard at around $1,320/t-$1,360/t, while the 500N was unchanged at $1,370/t-$1,410/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was down by $20/t at $1,050/t-$1,090/t, and the SN500 was lower by $30/t at $1,200/t-$1,240/t. Bright stock prices fell by a heftier $50/t to $1,220/t-1,270/t, FOB Asia.

The Group II 150N slipped by $60/t at $1,180/t-$1,220/t FOB Asia, and the 500N and 600N cuts were also down by $60/t to $1,230/t-$1,280/t, FOB Asia.

In the Group III segment, prices were steady. The 4 centiStoke was holding at $1,650-$1,690/t, and the 6 cSt at $1,630/t-$1,670/t. The 8 cSt grade was unchanged week on week at $1,360-$1,400/t, FOB Asia, all for fully approved product.

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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