Asia Base Oil Price Report


Steady demand and snug supply continued to support stable to firm prices in Asia, although some corners of the market have started to show softer numbers.

Spot indications were generally said to have remained unchanged week after week for most base oil grades, given continued tight availability against healthy buying interest, particularly for the heavy grades.

Demand has been characterized as healthy for most base stock tiers given heightened activity in the downstream lubricants segments during the spring season.

One exception within the API Group I segment may be bright stock, as values were said to have weakened over the last couple of weeks on ample supply and healthy inventories.

There was also talk that demand from the marine and industrial segments had not been particularly strong in recent weeks, and this was causing some lengthening of bright stock supply, leading to lower bids and offers. Markdowns of around U.S. $50-$60 per metric ton were reported for spot business, particularly into China.

At the same time, spot prices for the heavy-viscosity grades within the Group I segment appeared to be firm because of a tight market scenario of Group II heavy grades in Asia, with buyers replacing them with Group I grades whenever possible.

Availability of base oils has generally been limited over the last couple of months given a number of plant turnarounds in the region.

However, a couple of plants were heard to be in the process of resuming production. South Korean producer GS Caltex was expected to restart its base oils plant in Yeosu sometime this week, following a turnaround that lasted slightly over a month. The plant has capacity to produce 1,151,000 metric tons per year of Group II base oils and 146,000 t/y of Group III oils, according to LubesnGreases Guide to Global Base Oil Refining.

The producer had built inventories to cover most contract requirements during the outage, but had suspended spot exports, which were anticipated to resume next month.

In China, Sinopec Maoming was heard to be planning to restart its 403,000 t/y Group I/II base oils unit in Maoming in May as well, after completion of a maintenance program.

Market participants hoped that as facilities resumed production, the improved availability would lead to reduced upward price pressure on spot indications.

At the same time, a number of plants were scheduled to commence turnarounds in the next few weeks, including the large facilities of South Korean producer SK Lubricants. The producer will be taking its Group II/III plant in Ulsan off-line for a three-week turnaround in early June. The unit has capacity of 701,000 t/y of Group II and 1.3 million t/y Group III base oils.

For the time being, however, most spot indications remained well-positioned within the ranges observed a week ago, with the exception of bright stock, which has seen downward revisions as mentioned above.

On an ex-tank Singapore basis, API Group I solvent neutral 150 was steady at $690/t-$710/t. SN500 was also holding at $820/t-$840/t, and bright stock was assessed down by $30/t at $960/t-$980/t ex-tank Singapore.

Group II 150 neutral was unchanged at $700/t-$710/t and the 500N was at $870/t-$890/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was steady at $570/t-$590/t, and the SN500 was unchanged at $770/t-$790/t FOB, but bright stock was adjusted down by $55/t to $850/t-$870/t FOB.

Group II base oils were assessed at $630/t-$650/t FOB Asia for the 150N and at $830/t-$850/t FOB Asia for the 500N/600N.

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

Upstream, crude oil futures slipped by almost 1 percent on Monday, extending last week’s decline, on concerns that OPEC might not extend output cuts into the second half of the year, and indications that Russia would raise output if the deal on production cuts was not extended.

Last week, prices fell about 7 percent on indications that rising U.S. shale production partly offset OPEC’s production cuts of almost 1.8 million barrels per day during the first half of the year.

Russian oil output could climb to its highest level in 30 years if OPEC and non-OPEC producers do not agree to a six-month extension of the deal to curb output, market insiders said.

ICE Brent Singapore June futures settled at $52.41 per barrel on April 24, compared to $55.38/bbl on April 17.

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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