Asia Base Oil Price Report


A gradual tightening of supply, healthy demand and fairly steady crude oil values have collectively prompted significant spot price increases in Asia.

Participants described the general supply and demand balance as snug, particularly for the heavy-viscosity grades in the API Group II tier.

Availability of Group III base oils has narrowed as well, which surprised many, as it had been largely oversupplied on a global scale until just a few weeks ago.

The Group III tightening was said to be felt in various regions and appears to be the result of the extended outage of the GTL Pearl plant in Qatar and an ongoing turnaround at South Korean producer GS Caltexs Yeosu plant.

The GTL Pearl plant has capacity of 1,072,000 metric tons per year of Group III oils, and the GS Caltex plant can produce 146,000 t/y of Group III base oils, according to LubesnGreases Guide to Global Base Oil Refining.

The GS Caltex turnaround will also significantly affect availability of Group II cuts moving forward, as the facility can produce more than 1.1 million t/y per year of Group II oils.

This outage will start on the heels of a turnaround at ExxonMobils Group II unit in Singapore.

ExxonMobil was heard to have taken its Group II base oils plant in Jurong off-line 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.

Neither the GS Caltex nor the ExxonMobil turnaround schedules could be confirmed with the producers directly.

Prices for Group II base oils have jumped in the last two weeks, with offers for 150 neutral heard around U.S. $640 per metric ton, and bids closer to $610/t-$620/t. A March deal was heard concluded close to $620/t FOB Asia.

Despite the higher offers, there was strong buying interest for a few of the grades as buyers were concerned of possible supply shortages in coming weeks.

However, a limited availability of spot cargoes curbed the number of transactions that were concluded during the week, particularly as far as the heavy-viscosity grades were concerned.

In China, while buyers were somewhat worried about a potential scarcity of product, importers did not seem to be ready to accept the high offers from regional suppliers, and were holding off on negotiations.

China has also imported large amounts of base stock over the last two months, with January import volumes said to have climbed by more than 10 percent over December values. There were also large deep-sea cargoes scheduled to arrive between mid-February and mid-March, which could help relieve some of the tighter fundamentals, according to sources.

Asian spot base oil prices experienced significant increases during the week. Aside from reflecting higher bids and offers, assessments were adjusted up to bring the numbers more in line with market indications and published prices widely regarded as industry benchmarks.

On an ex-tank Singapore basis, API Group I solvent neutral 150 was assessed higher by $60/t at $670/t-$690/t.

SN500 was adjusted up by $100/t to reflect discussions at $800/t-$825/t. Bright stock moved up by $50/t to $975/t-$995/t ex-tank Singapore.

Group II 150 neutral was revised up by $50/t, to $680/t-$700/t. The 500N cut was also assessed up by $50/t, at $855/t-$875/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 edged up $20/t to $540/t-$560/t, while the SN500 jumped by $100/t to $730/t-$750/t FOB. Bright stock moved up by a more moderate $10/t this week, to $880/t-$900/t FOB.

Group II base oils were also higher, with the 150N revised up by $55/t to $600/t-$620/t, and the 500N/600N up by $60/t at $790/t-$810/t – all FOB Asia.

For the 500/600N grade, offers have climbed to around $820/t-$830/t, and bids were hovering about $20/t below those levels.

In the Group III segment, the 4 centiStoke and 6 cSt oils were assessed stable at $740/t-$760/t, but the 8 cSt was up by $40/t at $700/t-$720/t, all FOB Asia.

Upstream, crude oil values were steady to soft after falling to three-month lows on Monday, given that the market became less optimistic that OPECs output cuts would help reduce a global oil glut amid growing U.S. production.

ICE Brent Singapore May futures settled at $51.31 per barrel on March 13, compared to $55.50/bbl on March 6.

Correction: In a previous version of this report, it was stated that the SK-Repsol plant in Cartagena, Spain, had experienced an outage, but the company has confirmed that the plant did not have a turnaround and is running at normal rates.

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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