Asia Base Oil Price Report


Spot base oil prices in Asia were generally stable, with activity appearing to be in a holding pattern as buyers returned to the market and sellers assessed availabilities following the recent Lunar New Year holidays.

Market participants were heard to be in discussions for late February or early March shipments, but uncertainties over price direction and snug supply for a number of grades was limiting trade to a certain extent.

Surprisingly, one of the segments that was showing narrowed availabilities was the API Group III tier. While this sector has been oversupplied for the last several months, an upcoming turnaround in the Middle East may be contributing to tightening supplies, sources said.

There were reports that the Pearl gas-to-liquids plant, owned by Shell and Qatar Petroleum in Ras Laffan, Qatar, would be undergoing an extended turnaround of several months starting in March, but this could not be confirmed with the producer. The GTL unit can produce over 1 million metric tons per year (22,000 barrels per day) of Group III base oils, according to LubesnGreases Global Guide to Base Oil Refining.

The latest information also suggests that the base oil unit would undergo routine maintenance in March, as it has not been shut down since it started operations in 2012.

The company had communicated in a press release last December that the GTL plant was operating at a reduced rate due to unforeseen maintenance required on some or all of the 18 gasifier units, and it was heard that the unit has now been taken off-line.

If the base oil plant remains off-line for an extended period, players speculated that the producer would suspend spot shipments and there would be a tightening of Group III supply in the region. Furthermore, the producer may be looking for other sources of base stock to feed its own downstream lubricant units, sources speculated.

There were suggestions that ADNOC would be furnishing product to fill some of the supply gap.

There were rumblings that the Group III tightening, along with the recent hikes in crude oil values, had resulted in increased offers into the region and to India, in particular. As this news circulated, some saw it as indication that Group III prices may be experiencing upward pressure elsewhere in coming weeks.

However, sources also noted that Group III prices in India remained very low and this was possible because many of the imported cargoes did not have the approvals from original equipment manufacturers that make other material pricier.

Meanwhile, in China, a couple of pockets were also experiencing tightening on account of lower imported volumes and reduced production at local facilities in recent weeks.

The imminent arrival of imports was expected to offer some relief, however. Sources said that large volumes of Group I cuts – bright stock in particular – were anticipated to arrive in coming weeks from Europe. This was expected to result in more subdued demand for regional cargoes in March.

Spot bright stock prices have been on an upward trend since the last few weeks of 2016 as there had been limited local supply, but they are now expected to stabilize at current levels. Prices were assessed at U.S. $770/t to $790 per metric ton FOB Asia on Dec. 6, and were heard near $860/t-880/t FOB Asia this week.

There have also been a couple of shutdowns of Chinese base oil facilities, including Sinopec Jingmen’s Group II unit in Hubei province. The unit was said to have been restarted the first week of February, following an unplanned shutdown. The facility has capacity to produce 203,000 t/y of Group I oils and 100,000 t/y of Group II grades.

It was also heard that Sinopec Maoming’s Group II/III base oil trains in Guangdong province were slated to shut down for a month in mid March because of a lack of feedstock from the upstream refinery, which will be undergoing a turnaround at the same time.

Sinopec Maomings base oil plant can produce 100,000 t/y of Group II and 300,000 t/y of Group III oils. The unit can also manufacture over 300,000 t/y of Group I, but this train was apparently not affected by the shutdown. Sinopec completed an upgrade of the unit adding the 300,000 t/y of Group III oils to the plants slate in June 2016.

With few exceptions, base oil prices remained fairly stable during the week, with sellers hoping to see improved activity in the second half of the month as the spring purchasing season gets underway.

On an ex-tank Singapore basis, API Group I solvent neutral 150 was steady at $600/t-$620/t, while the SN500 was also unchanged at $690/t-$715/t and bright stock was at $925/t-$945/t.

The Group II 150 neutral was heard at $600/t-$620/t, and 500N was holding at $775/t-$795/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was assessed at $490/t-$510/t, while the SN500 was steady at $600/t-$610/t FOB. Bright stock was up by $10/t-$20/t, at $860/t-$880/t FOB.

Within the Group II category, 150N was heard at $510/t-$530/t, while the 500N/600N was holding at $700/t-$720/t, all FOB Asia.

In the Group III segment, the 4 centiStoke and 6 cSt oils were assessed slightly up by $5/t at $730/t-$760/t, and the 8 cSt grade also inched up by $5/t to $655/t-$675/t, all FOB Asia.

Upstream, crude oil values seemed to be holding at fairly steady levels. Futures moved slightly higher mid-week despite data showing the second-largest weekly climb for U.S. crude stocks, which appeared to be offset by an unexpected decline in gasoline supplies.

ICE Brent Singapore April futures settled at $56.59 per barrel on Feb. 13, compared to $56.77/bbl on Feb. 6.

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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