Asia Base Oil Price Report


Upward price pressure has not let up in Asia given the limited spot availability of a number of base oil grades, but some local values have edged down on currency fluctuations.

Sentiment among Asian base oil producers and sellers was still quite bullish, despite a recent softening in feedstock and crude oil numbers. However, crude oil prices recovered over the last few days, bringing Brent futures well above the U.S. $51 per barrel level.

Asian base oil participants continued to report tight supply of most grades on the back of current and upcoming plant turnarounds in Singapore, South Korea, Japan, Europe and the U.S. At the same time, demand is rising as it typically does during the spring season.

Spot prices have been moving up steadily and are expected to remain exposed to upward pressure over the next few weeks.

Not surprisingly, the price of base oil shipments into India has risen alongside other indications in the region, but some values were still considered more competitive than those in nearby countries.

The push to place Iranian cargoes into India – which are typically very competitively priced–had subsided during the Persian New Year celebrations in Iran over the last couple of weeks; however, now that the festive period is over, there are expectations that trade would start to pick up again. A few Group I cargoes were anticipated to be placed in coming weeks as a result.

March Group I prices in India jumped by at least $50-70 per metric ton compared to February values, and April negotiations were said to be taking place at higher levels as well. Group I SN150 was last heard discussed at $660/t-680/t CFR India, and SN500 was hovering at around $820/t-850/t CFR.

India has also been receiving large quantities of Group III material from the Middle East, with suppliers offering attractive prices to compete with Northeast Asian material.

There has been a drop in the number of cargoes imported into India from the U.S., as there were a couple of current turnarounds curtailing availability. At least one U.S. supplier that has consistently shipped product to India in the past was heard to be sold out and did not have any spot cargoes to offer.

There was growing buying appetite for most grades seen in China on the back of a couple of plant turnarounds, although some importers were still holding high inventories that they were trying to place with end-users.

Local Chinese prices have edged up somewhat, but buyers were said to have turned quite cautious in terms of acquiring smaller cargoes rather than large quantities, given a certain degree of price uncertainty.

Meanwhile, domestic prices in Taiwan were adjusted down by the local producer, Formosa Petrochemical Corp., for April shipments, but this was due to currency fluctuations rather than because of market fundamentals. Conditions were deemed fairly steady in Taiwan, with supply still described as snug.

Formosa adjusted down the list price of its API Group II cuts slightly to make up for a strengthening of the local currency against the U.S. dollar. The producer had increased domestic prices twice in March given buoyant market conditions.

Formosa’s April prices for the 70N and 150N grades were marked down by 0.20 New Taiwan dollars per liter compared to end-of-March assessments. For April domestic transactions, 500N was trimmed by NT$0.13/l.

Other than this downward price adjustment in Taiwan for domestic list prices, most indications in Asia were deemed stable to firm according to current discussion levels.

On an ex-tank Singapore basis, API Group I solvent neutral 150 was assessed at $680/t-$700/t. SN500 was steady at $820/t-$835/t, and bright stock at $980/t-$1,000/t ex-tank Singapore.

Group II 150 neutral was heard at $690/t-$710/t, while 500N was gauged at $865/t-$885/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was heard up by $10/t at $560/t-$580/t, SN500 was also up by $10/t at $760/t-$780/t FOB, and bright stock inched up by $10/t at $900/t-$920/t FOB.

Group II base oils also moved up slightly, with the 150N assessed at $620/t-$640/t and 500N/600N at $820/t-$840/t FOB Asia, showing a $10/t increase from last week.

In the Group III segment, the 4 centiStoke and 6 cSt oils were steady at $740/t-$760/t, and 8 cSt was holding at $710/t-$730/t, all FOB Asia.

Upstream, crude oil prices bounced back over the week, posting their strongest weekly gains of the year after local militia in Libya cut oil output by about one-third. However, numbers slipped slightly on Monday on reports that Libyan production had resumed.

Overall bullish sentiment was supported by analysts’ opinions that despite growing U.S. production, output increases in that country would not be significant enough to offset the cuts being made by the Organization of the Petroleum Exporting Countries and other oil producers. OPECs own data indicates a 94 percent compliance rate with an agreement reached last year to curb crude production.

ICE Brent Singapore June futures settled at $53.44 per barrel on April 3, compared to $50.48/bbl for May futures on March 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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