The Southeast Asian refiner was heard to have reduced the price of its ex-tank Singapore 150 neutral grade by $35 per metric ton, while its 500N cut was adjusted down $40/t, according to sources. The reductions became effective on Sept. 5.

The heavy-viscosity grade was said to be more abundant than the light-vis cut, and the price adjustment was therefore steeper, sources explained. The lighter grades are also usually in higher demand in Southeast Asia, compared to Northeast Asia, as temperatures are higher year-round and the lighter viscosity grades are preferred in many lubricant applications.

Group II prices have been exposed to downward pressure because of an oversupply situation, attributed mostly to the recent start-up of the Hyundai Oilbank-Shell base oil plant in Daesan, South Korea, and the Chevron plant in Pascagoula, Miss., United States.

Group I values have also softened, but there is some concern that regional supplies will tighten once the CPC-Shell plant in Kaohsiung, Taiwan, is shut down permanently before the end of the year. The plant is currently producing only heavy viscosity grades and will be shuttered ahead of the decommissioning of the Kaohsiung refinery in 2015.

In Taiwan, there were also reports that a producer had revised its domestic prices down in order to promote sales, as buying appetite from blenders has been very lackluster. It was not yet clear whether this strategy worked, but suppliers hoped that consumers would acquire more product in Sept. or Oct. in preparation for the last spate of production before the end of the year.

Taiwanese buyers prefer to secure product on the local market because prices are generally more competitive and transportation costs are lower. Offers for imports have gained little traction in recent months, with the local production deemed sufficient to meet the current call for product.

In China, demand has been slow to emerge, following the previous weeks holidays, perpetuating a tendency that has been observed during the past several months. Buyers were heard to be keeping lean inventories on concerns of being caught with high-priced stocks if prices weaken in coming weeks. The lackluster market conditions have also led to a decline in domestic base oil prices from the local majors, sources commented.

Indian market conditions have not been immune to the downward pressure prevalent in the region. An abundance of Group II offers -both for local product as well as imports, especially from the U.S. and South Korea -together with subdued demand during the monsoon season, have led to lower price indications over the last couple of weeks, sources said.

Furthermore, availability is expected to increase as a local producer was set to restart its Group II unit this week. Hindustan Petroleum Corp. Ltd. (HPCL) was understood to be ready to resume operations at its 225,000 ton-per-year Group II plant in Mumbai, following a routine turnaround that was slightly extended, sources said. The producer completed a one-month turnaround at its 250,000 t/y Group I unit in the second half of June.

In terms of spot prices, Asian indications had a softer undertone this week, with some of the ranges undergoing a notional price adjustment to reflect the prevailing downward pressure.

On an ex-tank Singapore basis, Group I solvent neutral 150 were assessed at $1,070-$1,120/t and SN500 at $1,060-$1,120/t, reflecting a $10/ton drop at the low end of the ranges. Bright stock was steady at $1,220-$1,270/t.

On an FOB Asia basis, Group I SN150 was mentioned at $980-$1010/t FOB, while SN500 was assessed at $990-$1,020/t FOB, also showing a $10/ton reduction at the bottom end of the spreads. Bright stock prices were unchanged at $1,170-$1,190/t FOB.

Within the Group II segment, prices for 150 neutrals were mentioned at $1,000-$1,020/t FOB Asia, $10/ton lower than the previous week, while 500N was heard at $1,010-$1,030/t FOB Asia, reflecting a $10/ton drop at the high end.

The Group III segment remained subdued, with prices of 4 centiStoke and 6 cSt oils assessed at $1,040-$1,080/t FOB Asia. The 8 cSt grade was heard at $1,020-$1,040/t FOB Asia.

On the shipping front, slightly more action than in the previous two weeks was keeping brokers busy this week, with a number of cargoes being discussed for shipment from South Korea. A 1,300-metric ton parcel was being quoted from Ulsan to Chittagong, Bangladesh, for Sept. 20-30 lifting. A 6,000-ton lot of two base oil grades was on the table for Daesan to Mumbai, India, for Sept. 21-30 shipment.

A 2,000-ton cargo was expected to be shipped from Mailiao to Merak, Indonesia, around Oct. 15-20. A 1,850-ton lot of two grades was quoted from Singapore to Malacca, Malaysia, for Sept. 20-25 lifting.

Lastly, a 1,000-ton lot was heard for Karachi, Pakistan, to Chennai or Ennore, India, for prompt shipment.

Upstream, October ICE Brent Singapore futures were trading at $96.63 per barrel in afternoon trading on Sept. 15, compared to $99.85/bbl on Sept. 8.