Asia Base Oil Price Report


Activity was fairly subdued due to local holidays in East Asia, with many buyers taking a step back to assess price direction and market conditions.

Some base oil segments continued to be roiled by conflicting currents. On one hand, firm crude oil prices in recent weeks had exerted upward pressure on pricing. In contrast, a slowdown in demand was tilting the market towards lower numbers.

These trends were deepening buyers concerns about where spot prices might be headed in coming days, with many hoping to secure cargoes at lower levels and suppliers trying to keep prices from deteriorating.

Lackluster demand for a number of grades, such as some of the heavy-viscosity grades, as the market heads into the fall season was also playing a significant role on price indications.

Sources said that prospects in downstream applications were difficult to measure, but requirements from these sectors traditionally start to decline in August.

Base stock producers were anticipated to start adjusting operating rates in order to help the supply and demand ratio remain more balanced during the last half of the year.

Increased availability of spot cargoes was anticipated to impact pricing during the last months of the year. Spot values had climbed steadily during the first half of the year on limited spot supply, but the tight conditions have started to ease.

A number of turnarounds have also been scheduled to take place in China in the next couple of months, but aside from impacting the local market, they were not expected to have a crucial effect on regional availability.

Sinopec Shanghai Gaoqiao Co. was heard to be planning to take offline its API Group II unit in Gaoqiao, Shanghai, in mid-August for a one-month maintenance program. The plant has capacity to produce 310,000 metric tons per year of Group II base oils, according to LubesnGreases Global Guide to Base Oil Refining.


Shandong Hengrunde was understood to have postponed the restart of its base oil plant in Shandong to the end of August. The plant, which embarked on a turnaround in late June, can produce 200,000 t/y of Group II base oils.

Sinopec Maoming Petrochemical was heard to be planning to restart its 400,000 t/y Group II/III base oils unit some time in August, having postponed the restart a number of times from an earlier date in May. Aside from routine maintenance, the Group III unit was heard to have been upgraded.

There was no producer confirmation about these turnarounds.

In South Korea, it was heard that operations at the base oil unit of GS Caltex in Yeosu had not been affected by a fire that broke out at the Vacuum Residue Hydrocracker (VRHCR) of the refinery on August 10.

GS Caltexs base oil unit can produce 1,151,000 t/y of Group II and 146,000 t/y of Group III base oils.

According to Reuters, the fire was rapidly extinguished and there were no injuries. The cause of the blaze and damage to the unit were still being assessed. This had been the second fire at the plant in eight days, the Korea Times reported.

GS Caltex’s 790,000 barrels per day refinery is owned by South Koreas GS Energy Corp. and U.S. oil major Chevron Corp.


As far as spot prices in Asia were concerned, given generally muted trading during the week, spot prices remained largely unchanged, with most discussions taking place within the assessed ranges.

On an ex-tank Singapore basis, Group I solvent neutral 150 was steady at $690/t-$710/t. SN500 and bright stock were unchanged at $840/t-$860/t and $930/t-$950/t, respectively.

Group II 150 neutral was unchanged at $700/t-$720/t, and 500N was assessed at $890/t-$910/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was heard at $560/t-$580/t and SN500 at $730/t-$750/t FOB. Bright stock was holding at $760/t-$780/t, with product heard to be changing hands close to the low end of the range for August lifting.

Group II 150N was assessed at $570-590/t, and the 500N/600N grades at $800/t-$820/t, all FOB Asia, following downward adjustments the previous week.

In the Group III segment, the 4 centiStoke and the 6 cSt grades were unchanged at $760/t-$780/t, and the 8 cSt cut was steady at $740/t-$760/t FOB Asia, but transactions were difficult to locate.

Upstream, crude oil futures edged up marginally on Monday, but concerns over a rise in crude production by OPEC kept U.S. crude prices under the key $50 per barrel mark.

Crude futures had weakened during the previous trading sessions as both the OPEC and the International Energy Agency noted that oil production had risen in July to almost 33 million barrels a day, as Libya, Nigeria and Saudi Arabia had ramped up output.

ICE Brent Singapore October futures were trading at $51.88 per barrel at the close of Asias trading on August 14, from $52.16/bbl on August 7.

Gabriela Wheeler can be reached directly at

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