Asia Base Oil Price Report


A downward price trend persists in Asian base oil markets, with values showing additional weakening this week as supply lengthens and demand subsides. This pattern was not completely unexpected, as consumption levels tend to fall during the last quarter of the year, with the exception of some corners of the market where demand experiences a temporary revival ahead of national holidays or religious festivals.

This was partly the situation in China, where importers had looked for product ahead of the Golden Week or National Day holiday on Oct. 1-7. Buyers were concerned about logistical difficulties and possibly higher prices after the holidays and had started to replenish depleted stocks during September. But recent and renewed pandemic-related lockdowns and restrictions related to the Chinese government’s zero COVID policies were dampening consumption in large areas of the country. China has banned residents from leaving Xinjiang over a COVID-19 outbreak – just weeks after this region, home to 22 million people, began relaxing restrictions from a strict extended lockdown, fueling public frustration due to food shortages and plunging incomes, according to These restrictions were expected to be tightened further ahead of the National Congress of the Chinese Communist Party, scheduled to start on Oct. 16. Xi Jinping was expected to consolidate his position as the top leader of the country and carry out a third term.

Chinese buyers continued to show interest in heavy grades and API Group I bright stock, which are always in short supply in the country, with discussions centering on Southeast Asian supplies. There were expectations that Thai and Japanese availability would tighten as a number of base oil plants will start, or have already begun turnarounds this month, but there were a few spot cargoes still being discussed for shipment to China. However, high freight rates may hamper the conclusion of business. About 10,000 metric tons were mentioned for shipment from Hong Kong to China in mid October.

In another key base oil consumer country, India, buying appetite for light grades has been healthier and lubricant manufacturers continued to acquire product, but mostly under term contracts. Buyers favored domestic product as long as prices were competitive to avoid the risk of spot cargoes coming from distant sources and having to purchase in U.S. dollars, which have strengthened against other currencies.

Nevertheless, a couple of cargoes were being considered for shipment from the U.S. to India, including about 8,000-10,000 metric tons of base oils for shipment from the U.S. Gulf to West Coast India in 2H Oct. It was not clear whether these transactions would come to fruition as prices for U.S. product remained too high.

Prices on a CFR basis have declined in India by $10 to $30 per metric ton for most grades week on week as sellers hoped to entice buyers. However, lubricant manufacturers were treading with utmost caution when it came down to accepting offers as it has been difficult to recoup the base oil price increases seen over the first half of the year. Blenders were still struggling with shrinking margins, particularly as the costs of other raw materials such as additives have also increased.

In order to achieve more balanced supply and demand fundamentals, several Asian refiners were heard to have trimmed production rates or were considering the implementation of this measure in coming weeks. Others were trying to place surplus product overseas, but buying interest in other regions was not strong either, as availability has lengthened and prices have declined in all regions.

In Northeast Asia, South Korean Group II and Group III producers and the sole Taiwanese Group II producer were still actively pursuing opportunities to export to destinations such as India, the Americas and the Middle East, although prices in India were depressed compared to other regions. The availability of several cargoes was placing downward pressure on pricing. There was mention of a 2,000-metric ton lot for shipment from Daesan, South Korea, to West Coast India in late Oct. A 2,000-4,000-metric-ton lot was quoted for lifting in Ulsan, South Korea, to Singapore for any October dates. In Southeast Asia, an 11,000-metric ton parcel had been discussed for shipment from Port Klang, Malaysia, to Durban, South Africa, and Brazil in late September.

The pressure on base oil pricing was not expected to be lifted by the measures implemented by suppliers alone, as economic factors beyond sellers’ and buyers’ control also impacted the market, such as the ongoing inflation and the potential of a global recession, with interest rates seeing increases not only in the U.S., but also in several other countries and consumer confidence levels taking a dip.

Given all the factors described above, Asian spot base oil prices were stable to slightly weaker this week. 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 have mostly fallen on lower bids and offers. Spot prices for the Group I solvent neutral 150 grade were down by $20/t at $1,000/t-$1,030/t, and the SN500 fell by $30/t to $1,150/t-$1,190/t. Bright stock was holding at $1,250/t-$1,290/t, all ex-tank Singapore.

Prices for the Group II 150 neutral were assessed lower by $30/t at $1,110/t-$1,150/t, while the 500N was also down by $30/t at $1,140/t-$1,180/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 edged down by $20 to $850/t-$890/t, and the SN500 also slipped by $20/t to $940/t-$980/t. Bright stock prices were unchanged at $980/t-1,030/t, FOB Asia.

The Group II 150N fell by $40/t to $900/t-$940/t FOB Asia, and the 500N and 600N cuts also were assessed lower by $40/t at $960/t-$1,010/t, FOB Asia.

In the Group III segment, prices were largely steady. The 4 centiStoke was assessed at $1,530-$1,570/t, and the 6 cSt was holding at $1,490/t-$1,530/t. The 8 cSt grade was unchanged at $1,210-1,250/t, FOB Asia, for fully approved product.

Upstream, crude oil futures have jumped to three-week highs as the OPEC+ has agreed to slash crude oil production by 2 million barrels per day – the largest cut since the height of the pandemic in 2020 – with the intention of bolstering prices. The move was likely to disrupt U.S.-led efforts to set a price cap for oil coming from Russia, which was seen as a way to limit the flow of money that the country has been using for its war on Ukraine, BBC News reported.

On Oct. 6, Brent December futures were trading at $93.17 per barrel on the London-based ICE Futures Europe exchange, from $89.87/bbl for November futures on Sept. 29.

Dubai front month crude oil (Platts) financial futures for November settled at $89.89 per barrel on the CME on Oct. 5, compared to $86.70 for October futures on Sept. 28.

Gabriela Wheeler can be reached directly at 

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

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