Market participants noted that freight rates had increased recently because of the proposed fees that the U.S. administration plans to impose on Chinese-owned and manufactured ships as of Oct. 14. The proposed fees have prompted ship operators to reshuffle their vessel lineups and move vessels built in China off U.S. routes. Freight rates have already gone up because there has been a decrease in goods moving to the U.S. due to the sweeping tariffs imposed by U.S. President Donald Trump, with fewer ships covering transpacific routes as a result. This has tightened vessel space and pushed freight rates up, according to sources.

“Freight rates from Asia to the U.S. and Latin America have increased a lot indeed,” a source conceded. A number of Asian suppliers were targeting India and other destinations closer to home.

Group I

Deviating very little from the previous few weeks, API Group I prices were holding at more stable levels than Group II values due to a tighter supply and demand balance. However, it seemed that Group II cuts have started to stabilize as well.

While additional Group I offers have emerged from Southeast Asia, availability was still not deemed abundant, especially for bright stock. However, the startup of ExxonMobil’s new Singapore Resid Upgrade Project, which will produce an extra-heavy viscosity Group II grade with similar properties to bright stock, may ease some of the scarcity. ExxonMobil communicated that the company had completed the first commercial shipment from its new facilities on Jurong Island (for additional information, see “ExxonMobil Completes Singapore Expansion” in the Sept. 24 edition of Lube Report Global).

Supplies of Group I SN150 have reportedly decreased in Asia over the last couple of weeks. The main supply source of Group I grades is still Southeast Asia, and most offers emerge from suppliers in this region. However, there have been reports of reduced rates at a Thai refinery, which could partly explain the tighter conditions of SN150. Most of the refiner’s customers have not experienced any impact on their contractual volumes, but others were heard to be looking for alternative sources of product. Thai supplies of the heavy grades were still understood to be plentiful.

Traders said that some inquiries for bright stock had emerged, but it was sometimes challenging to make numbers work as suppliers’ expectations were still fairly high compared to the figures buyers were comfortable with.

Last week, Thai flexibag offers of Group I SN500 and bright stock emerged for October loading, with the SN500 heard near $980 per metric ton FCA Thailand, down about $10/t from the previous week, and bright stock at $1,390/t FCA, or on par with the previous week’s indication. The supplier maintained its requirement to co-load the SN500 with the bright stock. These prices were heard to have been valid until Sept. 25.

In China, authorities in Guangdong province, in southern China, evacuated nearly 2 million people as Typhoon Ragasa hit Chinese territory on Sept. 24, after killing 21 people and injuring dozens in the Philippines, Taiwan and Hong Kong. The storm was also expected to affect the provinces of Hainan and Fujian. There are a number of base oil plants located in the affected areas, including Hainan Handi Petrochemical, but it was not clear whether they had incurred damages. There were reports that shipments from the region had been temporarily suspended.

Chinese base oil consumption has slowed down due to seasonal patterns, the National Day holidays (or golden week) celebrated Oct. 1-7, and economic uncertainties, particularly affecting manufacturing activities and industrial applications. Recent increases in vehicle electrification have also affected demand for base oils used in traditional engine oils. Demand for the higher-viscosity grades such as bright stock has also started to decline as consumers start to stock the lighter grades for cold-weather lubricant formulations. Domestic supplies of bright stock, which had been snug earlier in the year, have lengthened and importers were less interested in securing foreign base oils as prices were less attractive and imports were also in short supply.

Buyers in China were delaying purchases in hopes of attaining lower pricing in the coming weeks; some domestic suppliers have indeed reduced prices to compete with imports and lower their inventory levels. At the same time, sellers of imported product had also decreased prices to place cargoes ahead of the holiday period.

In India, Group I 500N prices have slipped due to an increased interest by exporters from the U.S., Europe and the Middle East to find buyers in the South Asian nation. At the same time, imports were competing with domestic prices, which local producers have adjusted down. Many overseas cargoes of Group I and Group II grades typically move to India in the fourth quarter as demand wanes in markets such as the U.S. and producers try to avoid oversupply conditions at home. Group I SN500 remained under pressure because of competition with the Group II heavy-viscosity cuts, which were heard to be available at attractive prices compared to Group I values.

The planned one-month turnaround at Chennai Petroleum’s Group I plant in Chennai that is slated to start in September or October was expected to tighten domestic supplies, although term volumes appeared to be sufficient to meet requirements.

Group II

Group II prices have started to stabilize, as producers maintained offer levels and some buyers have finally returned to the market to replenish stocks because they had put off purchases for as long as possible. South Korean refiners appeared to have by and large placed their cargoes for October, although some negotiations were ongoing. The heavier cuts were still more plentiful given that producers continued to prioritize their output due to refinery economics.

Several inquiries emerged during the week as some buyers were in need of replenishing stocks; most of the buying interest came from Southeast Asia. A few flexitank deals were reported concluded, with a Group II 150N cargo fetching around $825-$835/t CFR Asia. Deals involving 220N were heard near $845-$865/t CFR. Discussions for heavy grades also appeared to have picked up, with flexitank deals involving 500N heard to have been concluded near $975-$995/t CFR and a 600N cargo around $985-995/t CFR.

In China, prices for the Group II heavy grades remained under pressure as domestic suppliers competed for business and the National Day holidays approached, meaning business would almost come to a standstill for about a week. Automotive and heavy-duty lubricant demand had shown an uptick in the previous weeks leading to the holiday as large parts of the population traveled during the recess.

Domestic base oil prices had mostly been adjusted down in the weeks leading to the holiday; one exception may be a Shandong producer whose plant will be starting a 45-day turnaround in October and therefore felt less pressure to place product. Other domestic plants were heard to be trimming operating rates due to a feedstock shortage. Distributors had also lowered import prices to place products and avoid an inventory buildup.

In India, Group II prices were reported as mostly steady. There is keen buying interest in Group II heavy grades because Group I high viscosity grades were tight and Group II availabilities are offered at competitive prices. Several Group II shipments of Asian and U.S. origin were expected to move to India over the coming weeks.

Group III

Group III base oils enjoyed generally stable spot pricing, supported by fairly balanced supply and demand. However, there were reports that Group III supplies from a South Korean producer were still limited, although this did not seem to affect its term commitments.

In China, domestic producers were on a campaign to gain or maintain market share, offering attractive prices to fend off imports. Middle East suppliers have set their sights on other markets where profits were more reasonable. South Korean Group III volumes purchased under contract continued to move regularly to China.

In India, base oil consumption showed improved levels as the end of the monsoon season that affects many parts of the country was approaching. There was also an uptick ahead of the start of the Diwali festivities in October when people visit relatives in other parts of the country and there is an increase in purchases of consumer goods, cars and motorcycles. An additional consumption incentive has come from the Indian government’s reduced Goods and Services Tax. As of Sept. 22, the GST in India has started to follow a simplified structure with four standard rates: 0% and 5% for essential goods and services, 18% as the standard rate, and 40% for luxury goods. Most small cars will be subject to an 18% rate (from 28% previously), with large and luxury cars paying a 40% rate, but electric vehicles only a 5% GST. An increase in vehicle sales could lead to improved automotive lubricant demand in the country, particularly for factory-fill products.

The 4 cSt grade remained the tightest cut in India and import prices have inched up. Values for the 6 cSt and 8 cSt were reported as steady from the previous week. Additional domestic base oil production was expected to be introduced after national oil company Indian Oil Corp.’s expansion of its Group III plant in Haldia, scheduled for completion in the fourth quarter.

Most Group III prices were reported within the published ranges in Asia, but at least one producer’s prices carried a premium because of its full approvals and ability to offer global supply from multiple production sites. The producer’s lowest prices for all grades were above the high end of the published FOB Asia ranges. The published ranges may be adjusted in the coming weeks pending further market input.

Shipping

• 2,000-metric ton cargo was expected to be shipped from Mailiao, Taiwan, to Port Klang, Malaysia, at the end of September
• 2,500-ton lot was mentioned for shipment from Onsan, South Korea, to Huizhou, China, mid-October
• 1,000-ton parcel was expected to ship from Onsan to Zhangjiagang, China, on Oct. 20.
• 2,000-ton cargo was on the table for shipment from Onsan to Taichung, Taiwan, also on Oct. 20.1,500-ton lot was discussed for shipment from Onsan to Singapore on Oct. 20 as well
• About 1,000 tons were slated for loading in Onsan to Vietnam between Oct. 8-12, with a second 1,100-ton lot also discussed from Onsan to Singapore for similar dates
• About 6,000 tons to 8,000 tons were expected to be shipped from Daesan, South Korea, and Mailiao to Hamriyah, United Arab Emirates, in late October
• A 4,000-ton lot was mentioned for lifting in Ulsan, South Korea, to the Red Sea in mid-October
• Approximately 17,000-30,000 tons will likely be shipped from Yeosu, South Korea, to West Coast India the first week of October

Production

The global base oil supply and demand balance has started to ease as a number of turnarounds have been completed and plants have been restarted, although reduced output 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 II
Chennai Petroleum has scheduled a turnaround at its Group I plant in Chennai, India, in September or October for about one month.
Thai Lube Base Oil’s Group I unit in Sriracha, Thailand, was shut for 45 days from mid-July to the second half of August.
PetroChina’s Dalian refinery began a permanent shutdown in 2023. The base oils unit closed in late 2024, with full closure expected by July 2025. Inventory clearance was scheduled by the end of 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.
IRPC’s Group I plant in Thailand, offline for maintenance in May, has resumed operations.
In Japan, Group I supply remains tight after extended shutdowns at Idemitsu’s Chiba unit, which was completed at the end of July or early August, and Cosmo Oil’s Yokkaichi unit.
Eneos completed maintenance at its Kainan (May-June) and Mizushima B (February-May) plants. Mizushima A is scheduled for maintenance in October.
Two Eneos Group I plants were permanently closed in recent years.
HPCL in India restarted its Group I unit in late April or early May following a partial shutdown.
CPCL had a one-week maintenance at its Chennai Group I plant in April.
Sinopec completed a two-month turnaround at its Gaoqiao Group I and II plant in May.
Pertamina’s Group I plant in Cilacap, Indonesia, underwent maintenance from mid-January to late February or early March.
ExxonMobil has completed an expansion of its Singapore Group II unit and commenced on-spec production in August.
Bharat Petroleum delayed a brief turnaround to October from earlier in the year.
Formosa Petrochemical has postponed a scheduled turnaround and catalyst change at its Mailiao, Taiwan, plant from the fourth quarter of 2025 to 2026.
BPCL completed maintenance at its Group II plant in Mumbai, India, in March, but there were reports of ongoing reduced output that was expected to last throughout August, with a short shutdown planned that month.
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.
Excel Paralubes has scheduled a turnaround at its Lake Charles, Louisiana, plant in October. The plant has been running at reduced rates, limiting spot availabilities in the U.S.
GS Caltex completed a 45-day turnaround at its Group II/III unit in Yeosu, South Korea, in late February to May, which had limited spot supply.
Hyundai Oilbank Shell Base Oil cut run rates at its Daesan plant from March due to feedstock limitations and increased rates in late May.
An unplanned outage at CNOOC’s Group II unit in Huizhou affected China’s second-quarter availability.
Sinopec’s Gaoqiao plant turnaround ended in May; its Jinan Group II unit was shut for a month in April.
Luberef shut down its Group I and II units in Yanbu, Saudi Arabia, for two weeks in the second quarter for maintenance and catalyst change.
Chevron restarted its Group II plant in Pascagoula, Mississippi, after a four-week turnaround in late May.
Motiva restarted operations in June after a three-week turnaround at its Port Arthur, Texas, hydrocracker beginning in late May.

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 to three weeks in early May; operations have resumed.
Bapco began a turnaround and catalyst change at its Group III plant in Sitra, Bahrain, in May and completed it in late July.
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 edged down on Monday on expectations that OPEC+ will announce another output increase at its meeting on Sunday. At the same time, futures were trading at multi-week highs because of Ukrainian drone attacks on Russian refineries and prospects of additional sanctions on Russian energy exports.

• Brent November 2025 futures were trading at $69.17 per barrel on Sept. 29, up from $66.32 per barrel on Sept. 22 (ICE Futures Europe).
• Dubai crude futures (Platts) for October 2025 settled at $70.37 per barrel on Sept. 26, up from $67.43 per barrel for front-month futures on Sept. 19 (CME).

Base Oils
Spot base oil prices were steady to soft, with values for some grades moving down on growing supply and weaker demand.

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
Group I solvent neutral 150 was assessed at $780-$820/t, but the SN500 fell by $20/t to $1,000-1,040/t. Bright stock prices were down by $10/t at $1,370-$1,410/t (all ex-tank Singapore)
Group II 150N was adjusted down by $10/t to $830-$870/t, and the 500N was also lower by $10/t at $1,030-$1,070/t

FOB Asia
Group I SN150 was holding at $670-$710/t, but SN500 was assessed down by $10/t at $820-$860/t. Bright stock prices were hovering at $1,220-$1,260/t
Group II 150N was steady at $710-$750/t, and 500N was holding at $860-$900/t
Group III grades were largely unchanged, with 4 cSt hovering at $1,080-$1,120/t, 6 cSt at $1,070-$1,110/t and 8 cSt at $940-$980/t

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.