Despite the uncertainty in crude markets, most base oil prices were reported as steady, with transactions taking place within the ranges that have dominated the market over the last couple of weeks. Some grades were exposed to more upward pressure, given tighter supply and demand, but these conditions were anticipated to ease once a number of refineries complete their scheduled maintenance work.

Snug API Group I supplies have affected prices for some time, but recent and ongoing turnarounds placed even more pressure on prices, with bright stock values in particular on an upward trajectory for over a year. This week, momentum seemed to have stalled because buyers appeared reluctant to accept higher offers, as prospects in downstream applications were somewhat dim. Demand from economic sectors such as agriculture, construction and transportation was less robust than expected in the region, and consumers were unsure whether they would be able to offset the steeper base stock pricing through lubricant sales.

Given that Indonesian Group I producer Pertamina resumed production following a turnaround, and additional spot cargoes were expected to become available, some buyers preferred to delay purchases for as long as possible. The producer offered some small cargoes for spot business, but there was still a limitation in terms of volumes as the producer prioritized contract commitments, according to sources.

Base oil trading activity was expected to be subdued due to Eid. In Indonesia – home to the world’s largest Muslim population – millions of people will travel to their hometowns during the holiday. While Eid marks the biggest consumer spending time in the country, there are rising concerns among businesses that spending will drop this year as the middle class shrinks, Nikkei Asia reported.

Meanwhile, in Thailand, availability of Group I base oils was also heard to be strained, with bulk bright stock supplies for April heard to have been awarded, and buyers now hoping to be able to obtain May volumes.

In China, there was still buying interest for Group I base oils, with bright stock still a much-soughtafter grade as it is in short supply in the country, but buyers have grown increasingly resistant to higher prices. Spot prices have therefore remained largely stagnant and interest in Southeast Asian cargoes declined.

Chinese importers have been cautious about securing Group II cargoes as prices on the international market have strengthened over the last several weeks due to tight availability, but local producers have adjusted prices down to maintain their customer base. Buyers naturally preferred to secure domestic supplies when available and more so with prices being competitive, although there is always a deficit of the heavier grades in China.

The Group III segment saw increased efforts by buyers to consume domestic product and avoid the climbing cost of imports. There was also some nervousness regarding an upcoming plant turnaround in the Middle East, which may curtail availability. Domestic producers offered competitive prices as output grew in the country over the last couple of years and producers needed to capture market share.

In Japan, Group I production wasreduced due to ongoing turnarounds and the permanent closure of two ENEOS base oil plants in recent years. The Japanese government also consistently encouraged a switch to more competitive and sustainable operations amid a drop in domestic demand for refined products. ENEOS also announced that the company was considering relocating its lubricants production from its current plant in Yokohama to other existing facilities, but does not plan to scale back its lubricant business in Japan, according to Reuters. The refiner has yet to decide whether to continue making other products, such as grease, at the Yokohama plant.

Japanese and South Korean automakers have also expressed concern about the new 25% U.S. tariffs on foreign-made cars that are supposed to go into effect on April 3. The largest car exporters to the U.S. in 2024 were Mexico, Japan, South Korea, Canada, and Germany. The tariffs will be charged in addition to the ones that are already in place. The U.S. currently collects 2.5% on passenger vehicles and 25% on pickup trucks. The U.S. president said the auto tariffs will apply to all countries and also include automobile parts, such as engines, transmissions, powertrains and electrical components. The tariffs were expected to increase the price of imported cars, which is likely to lead to a slump in demand, and ultimately could impact the consumption of automotive-related products such as lubricants.

In India, buyers and sellers were focusing on their last efforts to finalize business ahead of the end of the fiscal year on March 31. There were expectations that this boosted lubricant sales and that inventories will have been depleted, although demand wasn’t as strong as anticipated. Following this period, consumers were likely to assess their product needs for the next few months and return to the market to replenish stocks. Some buyers were still hesitant given the recent downward trend of crude oil and gasoil prices, as they were concerned that they would be caught holding pricey inventories.

Group I grades have experienced an uptick in demand, as buyers secured supplies during a period of tight availability given plant turnarounds, both abroad and at Indian facilities. However, at least one Indian producer was anticipated to resume full production in late March or early April (as mentioned below), allowing for additional product to be offered. Import prices discussed on a CFR India basis have shown a slight increase of $5 per metric ton for Group I SN500 and bright stock grades.

Conversely, CFR India prices for the Group II 70N and 150N have slipped by about $5/t because of lower gasoil prices recently and adequate domestic supplies. Even though a local producer embarked on a maintenance program, it was expected to be completed at the end of March or early April, bringing more product into the market. Imported base oils were expected to reach Indian shores over the next few weeks and might relieve some of the current tightness.

Tight spot supplies of Group III grades in the region catapulted prices to upward in India, particularly for 4 cSt. Imports were heard to have increased by up to $15/t on a CFR India basis.

Production

The global base oil supply and demand balance may become more strained in the coming months as a string of permanent plant closures, unplanned outages and maintenance programs reduce availability across groups I, II and III.

PetroChina’s Dalian Petrochemical Group I plant in Liaoning province was shut down permanently in late 2024 due to the expected closure of the associated refinery in mid 2025 for its relocation. At the same time, there had been expectations that China National Petroleum Corporation/PetroChina’s Fushun plant, also located in Liaoning, would be producing additional Group I base oils that would likely help offset the Dalian closure, market sources said. Fushun has not yet confirmed the Group I volume it will bring online, but earlier estimates had put the Group I bright stock expansion at 60,000 metric tons per year. There were expectations that Fushun would be ready to start producing additional Group I in April. Sinopec was understood to have scheduled a two-month turnaround at its Gaoqiao Group I and Group II plant that started in March. Sinopec was also expected to shut down its Jinan unit for one month in April. An unplanned outage at the CNOOC Group II unit in Huizhou may be impacting availability in the domestic market.

South Korean producer GS Caltex was heard to have started a 45-day turnaround at its Group II/Group III plant in Yeosu in late February and had built inventories to cover term commitments during the outage, but spot supplies remained limited. The plant was anticipated to complete the maintenance program in April. Also in South Korea, Hyundai Oilbank Shell Base Oil had significantly reduced operating rates at its base oil plant since early March due to a refinery outage which had limited the plant’s feedstock supply. Rates were heard to have been increased, with the plant now running at around 80% capacity. In the Group III segment, SK Enmove will be completing a partial turnaround at its Ulsan, South Korea, Group III plant for two months, starting in May, but the shutdown was not expected to have a significant impact on supplies because of uninterrupted production on the facility’s other trains, company sources said.

In Japan, tight Group I conditions persisted after the extended shutdown of a Group I unit in Chiba following a fire at the lubricating oil production facility in mid 2024, but the plant was heard to have been restarted. This plant was scheduled for a turnaround in May. A Cosmo Oil unit in Yokkaichi underwent an extended maintenance program, which began in September 2024 and was completed at end of the year. Eneos also plans to complete maintenance at its Kainan and Mizushima plants this year. The Mizushima B plant was expected to be shut down in Feb. for an extended turnaround that will last until May. All of these shutdowns come on the heels of the permanent closure of two Eneos Group I plants over the last three years.

Pertamina’s Group I plant in Cilacap, Indonesia, underwent maintenance work from mid-January until late February/early March, according to reports. This had constrained the volumes available for export from the facility, but the plant was heard to have been restarted and more cargoes were expected to be offered into the spot market.

Another outage that was expected to have some impact on Group I supplies was the 10-day turnaround at the IRPC Group I plant in Thailand in May. While the producer was expected to build inventories ahead of the outage to meet term obligations, it was likely to prioritize domestic commitments and reduce volumes offered for spot business. Further down the road, it was heard that Thai Lube Base Oil PLC may be shutting down a Group I lube base oil production unit from mid-July until late August.

Hindustan Petroleum Corp. Ltd. was expected to have started a partial Group I and Group II turnaround in late February that may last until end of March/early April. It was heard that Bharat Petroleum Corp. Ltd. would be completing maintenance work at its Group II facilities in Mumbai this month. The maintenance program started in late February.

In the Middle East, Luberef will be shutting down its Group I and Group II units in Yanbu, Saudi Arabia, for maintenance at the end of the first quarter or beginning of the second quarter and was expected to limit spot sales to build inventories ahead of the shutdown. Bapco was heard to have scheduled a 45-day turnaround at its Group III facilities in Sitra, Bahrain, starting in March.

In the U.S., Chevron was also preparing to shut down its Group II plant in Pascagoula, Mississippi, in April for a three-to-four-week turnaround and was expected to build inventories to cover requirements during the outage, possibly causing some tightening of Group II spot supplies. There was no direct confirmation about the turnaround from the producer.

Prices

Crude oil futures opened higher during Monday’s Asian session following Trump’s threats to impose tariffs on Russia’s oil exports. However, concerns about a possible global recession and OPEC+’s plan to end output curbs in April weighed on prices.

On March 31, Brent May 2025 futures traded at $74.01 per barrel on the London-based ICE Futures Europe exchange, from $72.30/bbl on March 24.

Dubai front month crude oil (Platts) financial futures for April 2025 settled at $74/bbl on the CME on March 28, compared to $73.14/bbl on March 21.

Spot base oil prices were generally stable to firm during the week on subdued trading and tight supplies for some grades. 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 steady. Group I solvent neutral 150 was assessed at $790/t-830/t and SN500 at $1,030/t-1,070/t. Bright stock prices hovered at $1,360/t-1,400/t, all ex-tank Singapore.

Prices for Group II 150 neutral were heard at $840/t-880/t and 500N held at $1,070/t-1,110/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 hovered at $660/t-700/t and SN500 at $900/t-940/t. Bright stock prices were steady at $1,220/t-1,260/t, FOB Asia on tight supplies.

Group II 150N was steady at $720-760/t FOB Asia while 500N held at $970/t-1,010/t FOB Asia.

In the Group III segment, 4 cSt edged up by $10/t to $1,050/t-1,090/t and 6 cSt was assessed at $1,060/t-1,100/t. The 8 cSt was steady at $950/t-990/t.

Gabriela Wheeler can be reached directly at gabriela@LubesnGreases.com.
Lubes’n’Greases shall not be liable for commercial decisions based on the contents of this report.