Asia Base Oil Price Report


Supply appears to be getting tighter in Asia, limiting volumes available for spot purchases and lending support to stable to firm pricing.

The string of turnarounds that are scheduled at Asian base oil facilities over the next few months, together with the gradual increase in demand due to the start of the spring buying season, have driven suppliers to hike some of their prices in offers.

However, a few of the grades, such as the light-viscosity cuts in the API Group I segment, appear to be more readily available than their high-vis counterparts, and prices for the lighter cuts are therefore maintaining a steadier course.

Additionally, prices for April shipments from deep-sea origins such as the U.S. and Europe have also gone up on firmer crude oil values and snug supply in the respective regions.

In China, buyers were concerned about the possible restrictions of import volumes from a number of regional suppliers, as a few of them will be undertaking turnarounds in the next few months.

South Korean base oil producers typically export large quantities into other Asian destinations, but refiner GS Caltex is reportedly planning to take its base oils unit in Yeosu off-line for maintenance in March. The facility can produce more than 1.1 million metric tons per year of Group II oils and 146,000 t/y of Group III base oils, and the supplier was heard to be building inventories to cover requirements during the outage.

In Singapore, another major producer and exporter has shut down its plant for a turnaround. ExxonMobil was heard to have idled its Group II base oils plant in Jurong at the end of February for approximately 40 days. The unit has capacity to produce more than 1.5 million t/y of base stocks.

Not only volumes from large regional exporters will be more limited, but local production in some countries was expected to be reduced due to maintenance shutdowns as well, tightening domestic availability.

Such is the case of Japan, where several facilities will be off-line in coming months.

Idemitsu Kosan confirmed that the company would be shutting down its refinery in Chiba for maintenance from mid-April to late June. The producer’s base oil plant has capacity of 123,000 t/y of Group I and 138,000 t/y of Group II base oils, according to LubesnGreases Global Guide to Base Oil Refining.

JX Nippon was heard to be planning to shut down its 209,000 t/y Group I plant in Mizushima for two and a half months beginning in early May. The company’s second base oil unit in Mizushima, which has capacity of 183,000 t/y base oils, will not be affected.

There were also reports that Cosmo Oil would be performing a turnaround at its 119,000 t/y Group I plant in Yokkaichi for two months, starting in June.

Neither the JX Nippon nor Cosmo Oil turnarounds could be confirmed with the producers directly.

Meanwhile, TonenGeneral Sekiyu K.K. will not be able to resume full production at its Wakayama refinerys API Group I plant until the end of the year as it is rebuilding the equipment damaged by last months fire there. Most of the base oils produced at this location are for export.

Industry sources were skeptical about the company investing in the reconstruction of the Group I unit, as this base oil tier is being phased out in most countries, rather than seeing fresh investments. It remains to be seen whether the Wakayama plant will be restarted before the year is over.

Japanese sources noted that the Asian Group I market would likely be tighter during the next few months, but that local refiners would not be required to import Group I oils to meet requirements as they are in possession of ample stocks.

It was also heard that Thai producer IRPC would be postponing the restart of its Group I base oils unit in Rayong for a couple of weeks. The unit was originally expected to be brought back on stream in mid-March, following a turnaround which started in February. The facility can produce 326,000 t/y of Group I base oils.

In China, Sinopec was also anticipated to have reduced production in March as its 400,000 t/y Group II/III base oils unit in Maoming will be undergoing maintenance.

At the same time, there were reports that Taiwanese producer Formosa Petrochemical would be able to offer more tonnage into China in March as the producer has been running its Group II plant at full rates.

Bright stock was also expected to be in ample supply in China in March due to the arrival of several deep-sea cargoes.

In terms of prices, Asia base oil assessments were largely stable, although a couple of cuts were adjusted up to reflect current discussions.

On an ex-tank Singapore basis, API Group I solvent neutral 150 was assessed unchanged, in a range between $610 per metric ton and $630/t; SN500 was steady at $700/t-$725/t; and bright stock was also stable at $925/t-$945/t. These prices underwent upward revisions the previous week.

Group II 150 neutral was heard at $630/t-$650/t, and the 500N was assessed at $805/t-$825/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 moved up $10/t to $520/t-$540/t, and the SN500 also edged up by $10/t-$20/t to $630/t-$650/t FOB. Bright stock was up by $10/t this week, to $870/t-$890/t FOB.

Group II base oils were also slightly up, with the 150N assessed up by $5/t at $545/t-$565/t, and the 500N and 600N hovering at $730/t-$750/t – all FOB Asia.

In the Group III segment, there is still uncertainty as to when the Pearl plant will be back on stream and Middle East availability will improve, and therefore prices have edged up. Group III suppliers introduced increases as this segment had been weighed down by oversupply in recent months.

The 4 centiStoke and 6 cSt oils were assessed up by $10/t at the low end of the range at $740/t-$760/t, and 8 cSt was up by $5/t at $660/t-$680/t, all FOB Asia.

Upstream, crude oil values appeared to be moving sideways – with numbers changing little during the week – but numbers slipped in Asia on Monday on concerns over Russias compliance with a global deal to cut oil output.

ICE Brent Singapore May futures settled at $55.50 per barrel on March 6, compared to $56.63/bbl on Feb. 27.

Gabriela Wheeler can be reached directly at

LNG Publishing shall not be liable for commercial decisions based on the contents of this report.

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