Several producers lifted offers for February and March shipments by $20 to $30 per metric ton over January prices but had had to settle for more moderate hikes on a limited number of transactions. Some February and early March deals were heard concluded at increases of $10/ton over January prices and others at a rollover. Only in a small number of cases that involved base oil viscosity grades currently in tight supply – such as API Group I low-vis material and bright stock – had increases of $20/ton been pushed through, according to sources.

Sellers said that buying pattern of numerous buyers had changed and that many were not carrying high inventories, but were limiting purchases to what is needed on a day-to-day basis. As such, they were only securing cargoes agreed under term contracts and abstaining from participating in the spot market.

At the same time, spot cargoes for February and March shipment have been scarce because a number of Northeast Asian producers have committed most of their production under contract and have little to no spot tonnage to offer, although a few unsold cargoes of heavy-vis cuts were heard in the hands of traders in China.

In Southeast Asia, a Thai Group I producer was preparing for a turnaround and was therefore also curbing the number of cargoes offered into the market. In China, PetroChinas Group I plant in Dalian was expected to undergo a 40-day turnaround as well, starting in April.

Nevertheless, there were some signs that demand had started to pick up slightly for late March and April shipments, with a Taiwanese producer expecting to ship an increased number of cargoes to China in April.

The supplier typically moves most of its production under contract, and does not anticipate having any spot cargoes available for shipment in the coming month. While April negotiations have not yet started – and are not expected to be in full swing until the second week of March – the supplier said that its customers had already inquired about increasing their term volumes in preparation for the spring production season. The said producer had already finalized all of its March commitments before the Lunar New Year and has no spot cargoes available for March shipment.

A second supplier mentioned having seen heightened interest in the heavy-vis grades, such as Group II 500 neutral, which is not surprising, given that demand for the heavy stocks increases in spring and summer.

Another seller said that the current tightness for light-vis oils will be reversed, and that heavy grades will start to become less readily available instead. Currently, light grades in the Group I and II segments are snug because of healthy demand, coupled with reduced production due to lower profitability of these grades compared with heavier varieties. The light grades have been tight for a while now, and that situation still continues, a market source confirmed.

Buying sentiment in China has improved slightly in certain segments of the market last week, with domestic price indications for the Group II 60N and 150N edging up. This was partly attributed to a tightening of local supply as Sinopecs Jingmen Group II plant was taken off-line in January due to a feedstock shortage and will be undergoing an extended turnaround through April. Sinopecs Gaoqiao Group II plant was also idled for maintenance in mid-February and is expected to be down until April, according to sources. Domestic prices for low-vis grades from producers China National Offshore Oil Corp. and Hainan Handy have also inched up since the middle of last month.

However, domestic prices for 500N softened because of plentiful availability in trader tanks against pedestrian demand. There were also several cargoes of Taiwanese material that were booked for arrival in February and March.

Some of the price movements in China were mirrored in other Asian countries, although buying sentiment for the heavier cuts was generally more bullish than in China.

Group I solvent neutral 150 was heard at U.S. $940-$970/t FOB Asia, $10/t higher at the low end of the range because of tightening supply. SN500 was assessed unchanged at $1,030-$1,070/t, and bright stock at $1,130-$1,180/t, also steady week on week, all FOB Asia.

Prices for Group II material were heard at $1,000-$1,040/t FOB Asia for 150N, reflecting a $10 increase at the low end of the range on tight supply. Assessments for 500N were $1,050-$1,100/t FOB Asia, showing a $20 increase on higher bids and offers as demand for heavier grades has started to pick up in the region.

In the Group III segment, 4 centiStoke and 6 cSt oils were reported at $1,030-$1,080/t FOB Asia, reflecting a $20 hike at the top end of the range because of higher offers, and the 8 cSt grade was unchanged at $1,020-$1,050/t FOB Asia.

On an ex-tank Singapore basis, prices were heard at $1,020-1,060/t for Group I SN150, at $1,050-1,120/t for SN500 and at $1,170-1,230/t for bright stock.

On the shipping front, interest to move base oil cargoes seems to be on the rise. In South Korea, a 2,300-ton cargo was being quoted from Onsan to South China for prompt/early March shipment. A 1,500-ton lot was on the table for Yeosu to Koh Si Chang, Thailand, for March 5-20 lifting. A 2,500-ton parcel of four base oil grades was expected to be shipped from a Korean port to Merak, Indonesia, during March 20-31. A 4,500-ton lot of two grades was being discussed for Yeosu to Zhapu, China, for March 25-29 lifting. A 3,000-ton cargo of two grades was likely to move from Yeosu to Chennai, India, in March. Also ex-Yeosu, a 1,000-ton parcel of two grades was expected to be shipped to Ho Chi Minh, Vietnam, during March 5-20.

In Taiwan, a 2,250-ton lot was expected to be shipped from Mailiao to Mumbai, India, in early March. Another 3,750-ton cargo of two grades was being discussed for Mailiao to Mumbai for March 7-15 shipment.

A combined cargo of 3,000 tons SN500 plus 1,000 tons of bright stock was likely to cover Rayong, Thailand, to Nantong, China, during March 1-10.

Finally, a 5,000-ton parcel was being quoted from Kainan, Japan, to Hong Kong and Singapore for March 6-10 lifting.

Upstream, April ICE Brent Singapore futures were trading at $111.09 per barrel during the Asian trading day March 3, compared with March futures at $109.96/bbl on Feb. 24.

Gabriela Wheeler, based in Japan, can be reached directly at Gabriela@Lubesngreases.com