Sources said that the producer had lowered API Group I and II prices by $35 per metric ton on Dec. 29, including its solvent neutral 150, SN600, and bright stock in the Group I category, and its 150 neutral and 500N in the Group II segment.

The supplier had previously dropped prices by $25/t to 65/t, depending on the grade, on Dec. 12, according to sources, following a string of decreases which started in September. The producer adjusted prices down three times in December alone.

The producer also cut the price of bright stock, with shows that even this cut – which had experienced few fluctuations in the previous few months given a tighter supply scenario – could not resist the strong downward pressure.

Bright stock had been enjoying fairly stable pricing compared to its counterparts in Asia, because of the fact that this cut cannot be easily replaced in some downstream applications.

Additionally, bright stock was expected to remain tight in Asia because of reduced output from a couple of producers, and the permanent shutdown of CPC-Shells Group I base oils plant in Kaohsiung, Taiwan, in late November. The unit was still producing SN500 and bright stock at the time, but had ceased output of the light Group I cuts in mid 2013, and had been slated to close ahead of the dismantling of the CPC refinery in 2015.

The shutdown of the Taiwanese Group I plant signals the start of a possible series of Group I closures in the near future, as increased availability of Group II cuts at competitive prices has displaced the use of Group I oils in many industrial and automotive applications.

Most base oils will continue to face downward pressure as the market moves into 2015 because of the current oversupply situation, coupled with economic uncertainties which affect finished lubricants demand, and concerns over the continuous volatility of crude oil values, sources said.

Activity in Asia was understandably subdued during the week, with many participants being absent and little fresh business being concluded. However, the price assessments were adjusted down on lower buying and selling ideas, in line with the sharp downward trend observed over the last few weeks and the numbers widely accepted as benchmarks in the region.

On an ex-tank Singapore basis, Group I SN150 prices were assessed lower by $20-40/t at $810-$840/t, and SN500 at $800-$850/t. Bright stock was down by $20-30/t at $1,140-$1,170/t.

Group I SN150 was assessed lower by $20-30/t at $710-$740/t FOB, while SN500 was mentioned at $690-$710/t FOB. Bright stock prices were adjusted down by $30/ton at $1,090-$1,120/t FOB.

Within the Group II segment, prices were assessed lower by $40/t at $670-$690/t FOB Asia for 150N, and at $680-$710/t FOB Asia for 500N.

Group III prices were stable to soft from the previous week, with the 4 centiStoke and 6 cSt oils unchanged at $1,000-$1,020/t FOB Asia and the 8 cSt grade down by $10-20/t at $900-$920/t FOB Asia.

On the shipping front, a few inquiries to move product out of South Korea were being discussed this week, although it was obvious from the small number of cargoes being quoted that most business has either been settled before the holidays, or is going to close afterwards.

A 1,000-metric ton lot was still being worked on from Ulsan to Zhapu, China, for Jan. 5-10 lifting, while an 800-ton lot was expected to be shipped from Ulsan to Tianjin, China, on the same dates. A 2,000-ton cargo of two grades was also on the table for Yeosu to Tanjung Priok, Indonesia, for Jan. 10-15 lifting. Two 1,000-ton parcels were quoted from Yeosu to Merak, Indonesia, one for Jan. 10-15 lifting, and the second for Jan. 20-30 dates.

Upstream, February ICE Brent Singapore futures were trading at U.S. $59.91 per barrel in afternoon trading on Dec. 29, compared to numbers at $62.75 per barrel on Dec. 22.