Asia Base Oil Price Report


Several base oil price indications in Asia moved up on tight availability and reports that refineries in Singapore, Korea and China will be off-line in March.

According to sources, ExxonMobil is preparing to shut down its API Group II base oils plant in Jurong at the end of February for slightly over a month. The large unit has capacity to produce more than 1.5 million metric tons of base stock per year, according to LubesnGreases Global Guide to Base Oil Refining.

ExxonMobil also announced on Feb. 16 that the company would be expanding Group II base stock production at the refinery, with work scheduled to begin during the second quarter of 2017 and completion anticipated in 2019. For more details, see ExxonMobil Singapore Will Make More Group II.” The company did not reveal any capacity figures.

The refiner also explained that the expansion project in Singapore represents the latest in a series of recent ExxonMobil investments in base stock production, including a previous expansion of capacity at the Singapore refinery that was completed in 2014; a recently-commissioned project at the companys integrated facility in Baytown, Texas, which came on-stream in 2015; and introduction of Group II base stocks into European markets upon completion of the new Rotterdam hydrocracker unit, anticipated in 2018.

In South Korea, Group II and III producer GS Caltex was heard to be planning to shut down its base oils unit in Yeosu for maintenance in March. The facility can produce more than 1.1 million t/y of Group II oils and 146,000 t/y of Group III products.

It was also heard that Sinopec Maomings Group II/III base oil trains in Guangdong province would be taken off-line for a month in mid-March because of a lack of feedstock from the upstream refinery, which will be concurrently undergoing a turnaround.

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 will apparently not be affected by the shutdown.

Given these regional turnarounds, together with a prolonged outage in the Middle East at Shells GTL Group III plant in Ras Laffan, Qatar, starting in March, spot offers of several grades saw increases this week.

Group III prices in particular underwent significant upward adjustments in the last couple of weeks, given that a couple of the turnarounds will take out large volumes of these grades from the supply system.

Reports of increases near U.S. $50 to $60 per metric ton for 4 centiStoke and 6 cSt material offered into China from the Middle East for late February shipment circulated, but there was also talk about steep hikes for Group II material, although importers and buyers were taking some time to check around before jumping at the first offer.

Base oil spot prices were therefore assessed as stable to firm this week, with several grades undergoing upward revisions to reflect current buying and selling indications.

On an ex-tank Singapore basis, API Group I solvent neutral 150 was assessed up by $10/t at $610/t-$630/t, the SN500 was also up by $10 at $700/t-$725/t and bright stock was unchanged at $925/t-$945/t.

The Group II 150 neutral was up by $20/t at $620/t-$640/t, and 500N was also up by $20/t, at $795/t-$815/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 edged up by $10/t to $500/t-$520/t, while the SN500 was also higher by $10/t at $610/t-$620/t FOB. Bright stock was unchanged this week at $860/t-$880/t FOB, following an upward adjustment the previous week.

Within the Group II category, 150N was heard to be up by $20/t at $530/t-$550/t, while the 500N/600N was also higher by $20t, at $720/t-$740/t – all FOB Asia.

In the Group III segment, the 4 cSt and 6 cSt oils – after edging up last week – were assessed at $730/t-$760/t and the 8 cSt grade was at $655/t-$675/t, all FOB Asia.

Upstream, crude oil values showed a steady climb on reports that OPEC could extend its oil agreement to cut production with non-members, and might even seek larger cuts if global crude inventories failed to achieve the targeted levels.

OPEC members and other producers including Russia agreed to trim output by almost 1.8 million barrels per day in the first half of 2017. OPEC in January delivered record compliance of over 90 percent with its output curbs, according to estimates from the International Energy Agency and figures collected by OPECs headquarters.

Crude futures registered a sharp drop mid-week as U.S. crude and gasoline inventories hit record highs.

ICE Brent Singapore April futures settled at $56.14 per barrel on Feb. 20, compared to $56.59/bbl on Feb. 13.

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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