Asia Base Oil Price Report


Further upward spot price movements were observed in Asia this week, driven by healthy demand and limited availability of a number of base stocks.

Aside from firm crude oil and feedstock values, a major Southeast Asian refiners increase for June and climbing base oil prices in other regions were heard to be providing added support to higher price ideas. A second Asian producer was also understood to have nominated list price increases for June transactions.

According to sources, Taiwanese producer Formosa Petrochemical lifted its API Group II 70 neutral and 150N cuts by New Taiwan Dollar 1.42 per liter, while its 500N cut was marked up by NT$2.26/l as of June 1.

Both buyers and sellers in Asia reported that cargoes of the heavy-viscosity oils remained scarce, but there were expectations that the arrival of deep-sea material would offer some relief to current tightness.

According to sources, several large cargoes were on the water from Europe and the United States, with the parcels expected to arrive in late June or early July.

These volumes were anticipated to partially help meet spot demand in coming weeks, and also potentially deaccelerate the climb of base oil prices. Spot indications have been on a steady uptrend in recent weeks because of limited regional supply and upcoming plant turnarounds.

While the imported cargoes might help fill a temporary supply void, sellers remained fairly convinced that they would not be sufficient to cover all requirements and that buying interest would remain strong. However, demand is expected to dwindle as the busy spring lubricant production season starts to wind down.

In China, the first signs of a slowdown in demand have been noticed, with some importers holding off on commitments as current stocks were deemed sufficient to meet current and short-term demand.

Importers were hesitant to secure additional cargoes as the upward price momentum may start to lose steam, and they preferred not to be caught with higher-priced material if this were to happen.

Nevertheless, spot availability in China is not expected to improve significantly until August, when Formosa is slated to restart its Group II plant in Mailiao, following a two-month turnaround.

Formosa typically exports large quantities of Group II base oils to China, but the producer has cut back volumes over the last several months in preparation for its maintenance program.

Furthermore, several regional suppliers were operating with fairly low inventories, as production had been optimized since last July given falling crude oil and base oil prices throughout the year.

Some producers were also limiting the amount of material offered into the spot market, wanting to ensure they would have enough product to meet internal demand for lubricant production.

As a result of all of these conditions, Asian base oil prices were assessed as stable to firm this week on higher bid and offer levels.

Ex-tank Singapore indications for Group I cuts remained unchanged for a majority of grades, following upward adjustments the previous week on the heels of a key refiner’s increase, but the Group II cuts underwent slight upward revisions as offers inched up.

According to sources, the said producer will raise the price of its Group I solvent neutral 150, bright stock, and its Group II 150 neutral by U.S. $30 per metric ton as of June 8. The refiner’s Group I SN600 and its Group II 500N will increase $50/t. There was no producer confirmation forthcoming about the increases.

The Group I SN150 grade was steady from a week ago at $530/t-$550/t ex-tank Singapore. The SN500 was holding at $640/t-$660/t, while bright stock was heard at $1,030/t-$1,050/t ex-tank Singapore.

The Group II 150N cut was assessed at $570/t-$600/t ex-tank Singapore, reflecting a $10/t increase at the high end of the range, and the 500N moved up by $20/t at the low end of the spread to $750/t-$760/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was steady at $440/t-$460/t; the SN500 moved up by $10/t to $600/t-$620/t FOB. Bright stock was also up by $10/t at the low end of the range at $940/t-$960/t FOB.

In the Group II category, the 150N cut was unchanged at $540/t-$560/t FOB Asia, while the 500N/600N was also holding at $700/t-$730/t FOB Asia.

In the Group III tier, the 4 centiStoke and 6 cSt oils were assessed at $860/t-$890/t FOB Asia, and the 8 cSt grade at $610/t-$630/t FOB Asia amid a slowdown in transactions.

Upstream, crude oil prices rose during the week on the back of data showing a weekly drawdown in U.S. crude stockpiles, which partly offset downward pressure from OPEC’s decision not to set a ceiling for its production.

ICE Brent Singapore futures closed at $50.16 per barrel in afternoon sessions on June 6, compared to $48.96 per bbl on May 26.

Gabriela Wheeler can be reached directly at

LubesnGreases Publications shall not be liable for commercial decisions based on the contents of this report.

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