Asia Base Oil Price Report


The Asian base oils market entered the New Year riding a wave of steep crude oil values and fairly balanced supply and demand conditions, which encouraged some producers to introduce higher spot offers.

Suppliers were eager to offset some of the increases in feedstock costs that have squeezed margins in recent weeks, and they have therefore lifted some of their price expectations, depending on demand levels.

Some base oils, such as the lighter grades within the API Group I and II segments, were still heard to be leading the way in terms of requirements, and were therefore more exposed to upward pressure.

Orders of Group I and II grades were also expected to strengthen in the next few days as buyers were hoping to beat potential increases if conditions did not change.

While demand for Group III grades was predicted to display a steady, albeit moderate rise this year as applications that call for high performance, light viscosity oils are growing, this week, discussions revealed that prices were maintaining a fairly steady course. This was likely because supply of Group III cuts in general was ample in the region.

Although it was mostly export price indications that were climbing, prices at the local level were also inching up on firm fundamentals.

Such was the case of domestic list prices in Taiwan, where the local Group II producer, Formosa Petrochemical, was heard to have communicated price hikes for January shipments. The producers inventories were said to be balanced to tight, because of reduced operating rates at its base oils plant in Mai-Liao during last November, alongside a turnaround in an upstream unit. The next turnaround at Formosas base oil plant is scheduled for July this year.

Formosa was heard to be raising the domestic list price of its Group II 70N and 150N cuts by New Taiwan dollar (NT$) 1.34 per liter, while the producers 500N grade would be marked up by NT$ 0.41/l for January transactions.

In China, there was talk about domestic base oils prices moving up as well, while the government has also increased the official price of gasoline – which often impacts activity in the automotive sector and consequently, the base oils segment particularly, as some refiners might find it more lucrative to increase transportation fuel production versus base stocks.

According to media reports, Chinas National Development and Reform Commission announced that the retail price of gasoline and diesel would increase by Chinese Yuan 70 per ton at the end of December due to climbing international crude oil values. Gasoline prices in China increased to U.S. dollars 78 cents/liter in December from 77 cents/l in November of 2017, according to

Alongside local base oil increases in Asia, U.S. producers have also started to adjust prices to keep up with increases in crude oil and feedstock costs. Price adjustments in the United States often impact the price of exports into Asia, as a good number of cargoes move regularly from the U.S. to China, India and other destinations.

It was heard that Motiva would be lifting the price of its Group II STAR 4, 6 and 12 base oils by 10 cents per gallon as of Jan. 5. Other U.S. producers were discussing similar movements, but no other initiatives had surfaced by press time.

Asian spot price indications were assessed as stable to firm this week to reflect current discussions and market fundamentals.

Group I SN150 was steady at $700/t-$720/t ex-tank Singapore, while the SN500 grade was holding at $810/t-$830/t. Bright stock was also unchanged at $910/t-$930/t ex-tank.

Group II 150 neutral was assessed at $710/t-$730/t, and 500N was steady at $880/t-$900/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 edged up by $10/t to $630/t-$650/t, and the SN500 grade was heard at $730/t-$750/t, FOB Asia.

Bright stock was adjusted up by $10/t to $810/t-$840/t to reflect current bids and offers.

Group II 150N was up by $20/t at $640/t-$660/t, and the 500N/600N grades were unchanged at $770/t-$810/t, all FOB Asia.

In the Group III segment, 4 centiStoke and 6 cSt grades were hovering at $780/t-$800/t, while the 8 cSt was holding at $760/t-$780/t, FOB Asia.

Upstream, Brent crude oil jumped over the $68 per barrel mark in early trading on Thursday for the first time since 2015. Political protests in Iran, the third-largest oil producer in the OPEC, together with reports of a steep decline in U.S. crude inventories, pushed crude oil prices up. There were also concerns that the civil unrest in Iran could expand into Saudi Arabia, as the Saudi government trimmed fuel subsidies and announced plans to introduce a value-added tax on several products.

On Thursday, Jan. 4, Brent crude futures were trading on the London-based ICE Futures Europe exchange at $67.96 per barrel.

Gabriela Wheeler can be reached directly at

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