Weekly Asia Base Oil Price Report

The Singapore upgrade project entails the expansion of the company’s existing Group II plant capacity. The project adds around 20,000 barrels per day capacity of light, heavy and extra-heavy Group II base stocks, of which 6,000 bbl/d will be extra-heavy base stocks, including a new product that will be marketed under the EHC 340 MAX brand name.

Global bright stock supply declined by more than 20% between 2010 and 2024 as a result of Group I plant rationalizations, including those of an ENI unit in Italy, the Sapref facility in South Africa and two Eneos plants in Japan over the past three years. Reduced global capacity of Group I grades has steadily driven bright stock prices up. ExxonMobil claims its Singapore facility will be the first Group II plant to produce a cut meeting typical viscosity characteristics of a Group I bright stock. “EHC 340 MAX’s high viscosity and VI ideally position it as a cost-effective replacement for high-viscosity alternative base oils, traditional thickeners and viscosity modifiers,” the company said.

While demand for extra-heavy neutral base stocks in engine oils will likely continue to fall due to lower-viscosity trends, this is expected to be largely offset by the need for more greases, industrial oils and marine lubricants. The rise in consumption levels of these base stocks is due to increasing industrialization in Asia-Pacific and other developing economies.

Group I
As mentioned above, Group I global capacity has receded in recent years due to permanent plant closures, and more recently, the Group I segment experienced extremely tight conditions because of maintenance programs at several facilities. Southeast Asia and Japan are the main Group I production hubs within Asia, and recent turnarounds have been completed, offering some relief to the strained supply situation.

A Japanese producer was heard to have restarted its Group I plant and was expected to resume exports in September/October. Nevertheless, Japanese exports have been on a downward trend for several years as a number of refineries have been decommissioned because of the Japanese government’s encouragement for companies to comply with environmentally friendly fuel and lubricant production.

In Thailand, a producer has offered flexibags of Group I SN500 at slightly lower prices compared to last week, with the SN500 heard at $1,080 per metric ton FCA Thailand and bright stock at $1,440/t FCA Thailand, reflecting a $10/t decrease from a week ago. Results of a bulk tender closing late last week were not available at the time of writing.

Also last week, an Indonesian refiner had originally opened a tender for limited quantities of Group I grades and bright stock for August loading, but the tender was subsequently retracted because of urgent domestic base oil needs, which reflected the current tight conditions of the Indonesian market. Both Indonesian and Thai producers prioritize domestic requirements and have therefore been able to offer limited volumes for spot export transactions throughout the year.

Despite the restart of a number of Group I units in Southeast Asia, Japan and other regions in recent weeks, Group I base oil prices remained exposed to upward pressure, with bright stock still very sought after. At the same time, demand for some grades has begun to soften, particularly as Group II heavy grades have become available as an alternative to SN500 at attractive prices. A number of buyers were also reluctant to purchase additional cargoes and preferred to work down stocks as prospects in lubricant segments were somewhat hazy.

While China still has a deficit in domestic production of most base oil grades, some Group I and Group II barrels have been offered to the export market in recent weeks, with a Chinese producer closing a tender at the end of July for 3,000 tons of Group I SN500 for late August loading, thought to have been awarded to a Southeast Asian buyer, although this could not be confirmed.

Chinese activity in the Group I segment has been sluggish because of dampened industrial and agricultural production. The manufacturing sector has been performing better than anticipated, according to Chinese government data, but it has suffered from the tariffs imposed by United States President Donald Trump on Chinese exports moving to the U.S. While exports have not been greatly impacted yet, there has been a reduction in export volumes in July. The slowdown was also expected to affect shipping demand, which could eventually impact related marine lubricant and Group I base oil consumption.

In India, Group I prices were relatively stable this week, although the SN500 was under pressure because of the availability of competitively priced Group II 500N of South Korean origin. Some European cargoes have also been offered given reduced demand in that region during the traditional summer holiday months, but numbers did not seem to work. A majority of buyers hoped to be able to secure domestic product instead of having to rely on imports, but India does not produce enough base oils to cover all requirements, particularly as it does not produce Group III oils.

There have also been offers of Middle East Group I cargoes, but buyers were hesitant to secure this material due to potential international sanctions.

The Indian government has been in tense negotiations with the U.S. regarding tariffs on Indian exports, which President Trump has increased to 50% from 25% previously, effective Aug. 27. The increase was to penalize India for buying Russian crude oil, even though Indian refiners have already reduced their Russian purchases this year. However, the tariffs were unlikely to impact base oils directly as India does not typically export them to the U.S. and instead imports large quantities of base oils, which pay up to 31% in duties and taxes. But the U.S. tariffs on Indian goods could damage many other Indian manufacturing segments, given that the U.S. is India’s top export market, making up 18% of exports and 2.2% of GDP, according to the BBC. A 25% tariff could cut GDP by 0.2%-0.4%, risking growth slipping below 6% this year.

Group II
The market situation as observed over the last two weeks persisted, with Group II light-viscosity base oil prices showing some upward momentum and the heavy-vis cuts slipping on lengthening supplies. Most of the heavy-viscosity grades offered into India at competitive prices were heard to originate from a South Korean producer whose heavy-viscosity inventories have grown as its refinery continued to favor production of the heavy grades. It could not be ascertained this week whether the supplier was still requesting the co-loading of the Group II light grade 150N with the heavy grade 500N as in previous weeks. A second South Korean supplier was heard to be holding fewer stocks of the heavy grades. The sole Taiwanese Group II supplier was also heard to have offered spot cargoes for export.

In China, Group II capacity has grown significantly in recent years and most plants have now returned to production, nearly flooding the market with product. Even the light grades, which seemed to be tighter in other countries, have become more plentiful in China, as were the heavy-viscosity grades. But there were more regional offers of heavy-viscosity grades than of the lighter grades, which exerted pressure on the heavy cuts. The additional supply coincided with a period of reduced demand from lubricant applications as inventories were deemed plentiful and lubricant sales have slowed down, both due to a seasonal pattern and economic uncertainties.

In India, some buyers have already started to replenish stocks ahead of the end of the monsoon season in September as inventories have been used up. Demand for the Group II light grades remained fairly steady, supporting steady-to-firm prices. Offers of imported light cuts were heard to have inched up by about $10/t on a CFR India basis, while the heavy-vis 500N has slipped by $10/t CFR India on ample supplies. There were reports that a U.S. producer had offered Group II 600N cargoes into India, but prices were higher than for Asian products and involved increased logistics and a longer journey to destination.

Group III
While Group III plants have by and large returned to production following turnarounds in Asia and the Middle East, Group III spot availabilities were deemed somewhat tight in the region, supporting firm prices. This was particularly evident in India where Group III prices were heard to have inched up by $5-$10/ton on a CFR India basis for those who were looking to secure volumes beyond those specified in contracts.

Some cargoes that typically move to Europe and the U.S. may be redirected to India during the summer holiday period in Europe and the end of the driving season in the U.S., when engine oil demand declines, but it was not clear how much this availability might impact prices into India. A Group III cargo ex-Abu Dhabi was mentioned for shipment to India in the coming weeks.

The situation was quite the opposite in China, where Group III prices have been under pressure due to competitive moves by local producers whose aim is to conquer additional market share. Importers have also lowered their prices in order to compete and protect their customer base. A seasonal demand slowdown and downcast prospects in downstream automotive lubricant markets on a significant increase in vehicle electrification exacerbated the pressure on suppliers to hold on to existing accounts.

Shipping
• About 1,000 tons of base oils were expected to be shipped from Daesan, South Korea, to Port Klang, Malaysia, in the first half of August
• 2,000-3,000 tons were mentioned for shipment from South Korea/Taiwan to West Coast India/Pakistan in late August
• A 1,400-1,500-ton cargo was discussed for shipment from Onsan, South Korea, to Taiwan, the first week of September
• A 1,600-ton parcel was quoted for shipment from Onsan to Zhangjiagang, China, between Aug. 10-12
• A 1,000-ton lot was mentioned for shipment from Onsan to Vietnam at the end of August

Production
The global base oil supply and demand balance is likely to ease as a number of turnarounds will be completed and plants are expected to be restarted, although ongoing shutdowns at a few units together with permanent closures over the last few years may continue to crimp supplies in some base oil segments. Turnarounds that took place earlier in the year are still listed below as they may have impacted base oil pricing at the time of completion and beyond.

Group I
• Thai Lube Base Oil’s Group I unit in Sriracha was to be shut for 45 days from mid-July to second half August.
• IRPC’s Group I plant in Thailand resumed operations with limited spot availability for export since it was offline in May.
• Chennai Petroleum scheduled a turnaround at its Group I plant starting September. This follows a one-week maintenance in April.
• HPCL in India restarted its Group I unit in late April/early May following a partial shutdown.
• Inventory clearance from PetroChina’s closed Dalian refinery is scheduled by end August.
• CNPC’s Fushun plant in Liaoning is expected to increase Group I production to offset the Dalian closure. Bright stock capacity estimated at 60,000 t/y.
• Sinopec completed a two-month turnaround at its Gaoqiao Group I and II plant in May.
• Group I supply remains tight after extended shutdowns at Idemitsu’s Chiba unit in Japan, which was completed at the end of July/early August, and Cosmo Oil’s Yokkaichi unit. Eneos also completed maintenance at its Kainan (May-June) and Mizushima B (Feb.-May) plants. Mizushima A is scheduled for maintenance in October. Two Eneos Group I plants were permanently closed in recent years.
• Pertamina’s Group I plant in Cilacap, Indonesia, underwent maintenance from mid-January to late February/early March.

Group II
• Formosa Petrochemical has scheduled a turnaround at its Mailiao plant in the fourth quarter.
• GS Caltex completed a 45-day turnaround at its Group II/III unit in Yeosu (late February to May), with limited spot supply.
• Hyundai Oilbank Shell Base Oil cut run rates at its Daesan plant from March due to feedstock limitations; increased rates in late May.
• An unplanned outage at CNOOC’s Group II unit in Huizhou affected China’s Q2 availability.
• Sinopec’s Gaoqiao plant turnaround ended in May; its Jinan Group II unit was shut for a month in April.
• BPCL completed maintenance at its Group II plant in Mumbai in March, but there were reports of ongoing reduced output that may last throughout August.
• HPCL reportedly conducted a 45-day turnaround at its Group II trains that started in May and was completed in July after a delayed restart.
• Luberef shut down its Group I and II units in Yanbu, Saudi Arabia, for two weeks in Q2 for maintenance and catalyst change.
• Chevron restarted its Group II plant in Pascagoula, Mississippi, U.S., after a four-week turnaround in late May.
• Motiva restarted operations in June after a three-week turnaround at its Port Arthur, Texas, U.S., hydrocracker beginning in late May.
• Excel Paralubes has scheduled a turnaround at its Lake Charles, Louisiana plant in October. It has been running at reduced rates, limiting spot availabilities in the U.S.

Group III
• SK Enmove completed a partial turnaround at its Ulsan Group III plant in late June; production on other trains continued.
• Adnoc shut its Group II/III plant in Ruwais, UAE, for two-three weeks in early May; operations have resumed.
• Bapco reportedly began a two-month turnaround and catalyst change at its Group III plant in Sitra, Bahrain, in May (not confirmed).
• Hainan Handi had an extended shutdown at its plant in China, starting in mid-June.
• Sinopec was expected to restart its Group III plant in Yanshan in late July.

Prices

Crude
Crude oil futures started the week largely unchanged as analysts focused on the possible outcome of a meeting between President Trump and Russian President Vladimir Putin scheduled on Friday in Alaska, U.S., to negotiate an end to the war in Ukraine. Futures had fallen more than 4% last week as OPEC+ had announced plans to increase crude output in September.

• Brent October 2025 futures traded at $66.71 per barrel on Aug. 11, down from $68.62/bbl on Aug. 4 (ICE Futures Europe).
• Dubai front-month crude futures (Platts) September 2025 settled at $66.86/bbl on Aug. 8, down from $69.74/bbl for front-month futures on Aug. 1 (CME).

Base Oils
Spot base oil prices were mixed, with values for some grades slipping on growing supply while others were hovering at steady levels or moved up slightly due to tighter conditions. 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
Group I solvent neutral 150 was steady at $820/t-$860/t
SN500 was adjusted down by $10/t to reflect current discussions at $1,070/t-$1,110/t
Bright stock prices were firm at $1,390-$1,430/t (all ex-tank Singapore).

Group II 150N held at $850/t-$890/t
500N slipped by $10/t to $1,070/t-$1,110/t

FOB Asia
Group I SN150 was stable at $690/t-$730/t, but the SN500 was down by $10/t at $900/t-$940/t; bright stock was firm at $1,280/t-$1,320/t

Group II 150N edged up by $10/t to $710/t-$750/t, but the 500N was adjusted down by $10-$20/t to $890/t-$930/t

All Group III grades were assessed lower by $10/t, with 4 cSt heard at $1,090/t-$1,130/t, 6 cSt at $1,080/t-$1,120/t and 8 cSt at $960/t-$1,000/t (all FOB Asia) on subdued activity and more plentiful supplies

Gabriela Wheeler can be reached at gabriela@LubesnGreases.com

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