Asia Base Oil Price Report


Demand generally weakened in Asia, which was typical market behavior given the approach of the year-end holidays and the usual pressure on both buyers and sellers to lower inventories and avoid tax implications. This condition led to downward price adjustments, as suppliers made a last-minute effort to place additional volumes, but many buyers appeared reluctant to acquire cargoes as they preferred to use up existing stocks and wait for further downward price adjustments.

In China, uncertainties related to the lifting of zero-COVID-related restrictions led to a fairly chaotic response, both from the general population, as well as local authorities. While infections rose, local authorities in several large cities urged employees to go to work despite being infected. This was thought to be prompted by the need to achieve an economic recovery. For three years, the government’s strict zero-COVID policies has kept COVID infections and deaths at relatively low levels in China, reported, but they have also wreaked havoc on the economy. But the sudden policy shift was also causing a strain on the country’s health system and an increase in COVID-related deaths. “As fears spread over the looming wave of cases, subway systems and streets have emptied in recent weeks, which is unusual for this time of the year,” the article added.

This scenario has led to a slowdown in activity in major cities, and reduced demand for fuels. Base oil consumption has also fallen, with local supplies deemed adequate to cover the current call for product. Domestic base oil prices have decreased, making imports less competitive as well. Importers did not foresee consumption to increase until after the Lunar New Year in late January.

Market activity was fairly subdued in India as well, although there appeared to be some interest for light-viscosity grades, which were less readily available than their heavier counterparts. This was partly attributed to high fuel prices seen throughout the year and a likely move by refiners to increase distillates output versus base oils or blending of light grades for diesel. Buyers were relying heavily on cargoes purchased under term contracts as they preferred to avoid the risks associated with spot purchases.

They also preferred to work down the inventories at hand, but for slightly different reasons than in other countries because the fiscal year does not finish until the end of March in India. Consumers were concerned about holding pricey inventories and preferred not to purchase any more barrels in case prices fell later on. At the same time, they were aware that demand in Asia picks up in the first quarter and were therefore worried that availability would tighten, and fewer cargoes would be offered into India.

There were indications that some imported cargoes might reach Indian shores in the next few weeks, with several of them being discussed for shipment from South Korea. A 5,000-metric ton parcel was on the table for shipment from Onsan to Mumbai in mid-January. Another 5,000-mt lot was expected to be shipped from Singapore to Mumbai the first week of Jan. About 1,000-2,000 metric tons were quoted for shipment from Daesan to Mumbai in December.  A 5,000-ton cargo was discussed from Yeosu to Mumbai for Jan. lifting. Approximately 6,000-8,000 metric tons were being considered for shipment from Daesan and/or Ulsan and/or Pyongtaek to East Coast India in the first half of January. A 4,000-ton cargo was expected to be shipped from Onsan to Chennai in mid-December. It was also heard that 13,000 metric tons shipped from Singapore to Mumbai and Jawaharlal Nehru Port Trust in early December.

Southeast Asian supplies, particularly of API Group I grades, were growing as most plants that were on turnaround in the previous two months restarted operations, including two Thai facilities. The heavy grades were abundant, and prices have therefore seen heftier downward adjustments.

Spot base oil prices were steady to softer from a week ago on weaker demand and lengthening supplies. The price 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 were assessed lower week on week. Spot prices for the Group I solvent neutral 150 grade were heard down by $20/t at $940/t-$970/t, and the SN500 was also down by $20/t at $1,050/t-$1,090/t. Bright stock was lower by $20/t as well at $1,230/t-$1,270/t, all ex-tank Singapore.

Prices for the Group II 150 neutral dropped by $20/t to $1,010/t-$1,050/t, and the 500N also fell by $20 to $1,050/t-$1,100/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was lower by $20/t at $810/t-$850/t, and the SN500 fell by $50/t to $830/t-$870/t. Bright stock prices were unchanged at $990/t-1,040/t, FOB Asia.

The Group II 150N was assessed lower by $50/t at $840/t-$880/t FOB Asia, and the 500N and 600N cuts fell by a heftier $60/t to $880/t-$910/t, FOB Asia.

In the Group III segment, prices were stable to softer. The 4 centiStoke was assessed down by $10/t at $1,520-$1,560/t, and the 6 cSt was holding at $1,490/t-$1,530/t. The 8 cSt grade was heard at $1,210-$1,250/t, FOB Asia, for fully approved product.

Upstream, crude oil prices edged higher on Wednesday, driven by a U.S. Energy Information Administration report showing that crude inventories had been drawn down more than expected during the previous week. However, prices were weighed down by the likelihood of severe weather in many parts of the U.S., which was likely to affect travel and fuel consumption.

On Dec. 22, Brent February 2023 futures were trading at $82.54 per barrel on the London-based ICE Futures Europe exchange, from $81.21/bbl on Dec. 15.

Dubai front month crude oil (Platts) financial futures for January settled at $78 per barrel on the CME on Dec. 21, compared to $77.86/bbl on Dec.14.

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.

Related Topics

Base Oil Pricing Report    Market Topics    Other