Asia Base Oil Price Report


Rising crude oil values, sparse spot supply, and climbing base oil indications in other regions continued to exert upward pressure on prices in Asia.

West Texas Intermediate crude oil values vaulted over the U.S. $50 per barrel mark for the first time in almost a year on expectations that U.S. oil stockpiles would fall more than expected and concerns about global supply shortfalls due to attacks on Nigeria’s oil industry.

ICE Brent Singapore futures closed at $50.17 per barrel in afternoon sessions on June 13, compared to $50.16 per bbl on June 6.

Several base oil buyers were heard to be looking for spot cargoes of heavy-viscosity grades, but producers do not have much material to offer as they continue to prioritize their contractual obligations.

In Taiwan, Formosa Petrochemical Corp. was expected to start a two-month turnaround around June 20. Formosa’s base oil plant in Mailiao can produce 600,000 metric tons per year of API Group II products, according to Lubes’n’Greases Guide to Global Base Oil Refining.

Formosa lifted its domestic list prices for the month of June due to limited supply and rising raw material costs. The producer has built inventories to cover most contractual commitments during the outage, but supply of spot cargoes to China was suspended a couple of months ago.

This movement resulted in a significant tightening of spot availability in China, given that the producer typically exports large spot volumes to that country, and also ships close to 40,000 metric tons per month under contract. Since April, these cargoes have been cut back to around 30,000 tons per month, and spot volumes also started to be reduced at that time.

Also in China, it was heard that Panjin Northern Asphalt had taken its 400,000 t/y Group II unit in Liaoning province offline for a month-long turnaround in May, but this could not be confirmed.

Likewise, there were reports that Shandong Heng Runde Group had undertaken a turnaround at its 200,000 t/y Group II base oils unit in Shandong province in May.

Importers and end-users had scrambled to secure spot cargoes in April and May in preparation for the active spring blending season, even sourcing large cargoes from the U.S. and Europe. Some of these parcels are still on their way and are expected to arrive in late June or July.

Buyers had kept lean inventories since late last year because of sliding base oil values and, therefore, inventories were depleted at the start of spring, which sent them back to the market in March/April.

However, a more cautious attitude towards purchasing is beginning to emerge in China, as the spring production cycle is expected to slow down within the next few weeks, and consumers prefer not to carry high inventories when fall arrives.

Meanwhile, in India, prices for Group I base stocks have climbed, as there were fewer cargoes offered from Iran given that they were redirected to the United Arab Emirates ahead of the start of the religious fasting period of Ramadan on June 6.

Selling ideas inched up by $20/t and were hovering at $530/t-$550/t CFR India for solvent neutral 150 and at $540/t-$560/t CFR India for SN500. Indications for bright stock were stable at $890/t-$920/t CFR India.

In general terms, spot prices were largely assessed as stable in Asia this week, following several upward revisions the previous two weeks.

On an ex-tank Singapore basis, the Group I SN150 grade was steady at $530/t-$550/t ex-tank Singapore. The SN500 was holding at $640/t-$660/t, while bright stock was unchanged at $1,030/t-$1,050/t ex-tank Singapore.

The Group II 150 neutral cut was assessed at $570/t-$600/t ex-tank Singapore, and the 500N was unchanged at $750/t-$760/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was steady at $440/t-$460/t; the SN500 was heard at around $600/t-$620/t FOB. Bright stock was gauged at $940/t-$960/t FOB.

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

In the Group III tier, the 4 centiStoke and 6 cSt oils were heard at $860/t-$890/t FOB Asia, and the 8 cSt grade at $610/t-$630/t FOB Asia in thin trading.

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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