Asia Base Oil Price Report


Base oil prices in Asia continued to move up, driven by strengthening crude oil futures, tight availability and healthy demand for the heavy-viscosity grades.

Brent futures have been jumped over the U.S. dollars $68 per barrel mark, placing upward pressure on base oil prices and prompting suppliers to up their offer levels.

The heavy-vis cuts, both in the API Group I and II categories, continue to see steady requirements against dwindling supplies, which provided extra support to the higher price indications.

The light-vis grades are more readily available and therefore prices have not seen upward revisions of late.

Aside from an increase in demand levels for the heavy-vis cuts compared to earlier in the year, some of the product tightening has been attributed to two turnarounds taking place in March or April -those of Formosa Petrochemical’s Group II plant in Taiwan and SK Lubricant’s Group II unit in South Korea. Both producers have reportedly resumed production, but were said to have had no spot material to offer over the last couple of months.

Yet a third plant is poised to be taken offline for a turnaround in the next couple of months. S-Oil’s Group II plant in Onsan, South Korea, is expected to undergo a one-month maintenance program, starting in early July, while the company’s Group III unit is expected to be taken offline in October. The producer undertakes a turnaround at its facilities every two years. The plants have a Group II capacity of slightly over 1 million metric tons per year, and 880,000 t/y of Group III oils.

Sources said that spot availability from S-Oil was expected to diminish because the producer was building inventories to cover for the shortfall in production during the turnaround to continue to meet its contractual obligations.

Demand for the Group I heavy-vis cuts continues to be healthy throughout the region, supporting spot price increases of U.S. dollars $10/t-20/t in the last couple of weeks for SN 500 and bright stock.

The higher regional spot prices have prompted local producers in India to revise up domestic prices of Group I base oils as well.

According to sources, prices of SN70 and SN150 were lifted by 0.80 Indian rupees per liter, SN500 by a heftier Rs 3.00/l, while bright stock was increased by Rs 1.70/l.

Sources commented that domestic prices had fallen behind those of imports and were therefore deemed more attractive than material exported by producers in the region.

While some of the price assessments for Asian base oils were steady this week, a few were adjusted up to reflect current discussions as suppliers were hoping to improve margins by raising offer levels, as higher crude oil values were placing pressure on prevailing values.

Prices were also revised to bring them in line with current published prices which are widely considered as benchmarks for transactions in the region.

On an ex-tank Singapore basis, Group I solvent neutral 150 prices were steady at $660/t-$680/t, while SN500 was assessed up by $10/t-20/t at $730/t-$760/t and bright stock was also up by $10-20/t at $1,080/t-$1,100/t.

On an FOB Asia basis, Group I SN150 was holding at $550/t-$580/t FOB, while SN500 was also fairly stable at $630/t-$650/t FOB. Bright stock prices were up by $20/t at $1,060/t-$1,080/t FOB.

Within the Group II category, prices for 150 neutral were holding at $570/t-$610/t FOB Asia, and prices for 500N were largely unchanged at $680/t-$720/t FOB Asia.

In the Group III segment, the 4 centiStoke and 6 cSt oils underwent a slight downward revision at the top end of the range at $920/t-$940/t FOB Asia, while the 8 cSt grade was heard at $730/t-$750/t FOB Asia.

Activity on the shipping front appeared to be slow to pick up the pace following the Golden Week/Labor Day holidays, with only a handful of fresh inquiries noted. A 2,500-ton cargo of two base oil grades was being discussed for Yeosu, South Korea, to Zhenjiang, China, for May 11-20 shipment. A 4,840-ton lot was on the table for Onsan, South Korea, to Yingkou and Tianjin, China, for May 14-16 lifting. A 3,000-ton parcel was quoted for Cilacap, Indonesia, to Tianjin for May 20-30 shipment. A 9,600-ton parcel of seven grades was under discussion for Yeosu to Mumbai and Ennore, India, for May 20-28 shipment.

Upstream, June ICE Brent Singapore futures were trading at $65.53 per barrel in afternoon trading on May 11, compared to $66.70 per barrel on May 4.

Gabriela Wheeler can be reached directly at

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