Asia Base Oil Price Report


Base oil spot prices were generally stable this week, with participants noting that supply and demand conditions remained one of the main drivers of the current price trend.

Upcoming and ongoing turnarounds were expected to tighten the market, lending support to current price indications. Producers sometimes choose the second half of the year to schedule their turnarounds because demand tends to slow down during the summer months, and this appears to be the case for a number of suppliers in China, Taiwan and South Korea.

In recent years, some of the supply gaps arising in Asia due to turnarounds or other production issues would be filled with deep-sea cargoes from Europe and the United States. However, this year the imports that cover some of these supply deficits originate in Southeast Asia and the Middle East, sources said.

Concerns over the impact that new tariffs imposed by the United States and China could have on the base oil trade appeared to be mitigated by reports that base oil imports from the U.S. into China have declined in recent months.

Base oil prices in general come under pressure at this time of the year, but fundamentals appear to be defying traditional trends, with values remaining fairly firm since the beginning of the year.

This was partly attributed to the steep cost of raw materials, as these continued to impact base oils and lubricants, particularly given the unpredictability of crude futures. Producers lamented that their margins continued to be squeezed given the recent price jumps, and that it was almost impossible to ascertain future price direction.

Spot discussions were somewhat subdued this week, with few significant changes noted in pricing, and levels reported within the ranges portrayed below.

Spot prices on an ex-tank Singapore basis were steady, with Group I SN150 holding at $780/t-$800/t, and the SN500 at $890/t-$910/t. Bright stock was noted at $960/t-$980/t, all ex-tank Singapore.

Group II 150 neutral was unchanged at $820/t-$850/t, and the 500N cut at $910/t-$930/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was heard at $700/t-$720/t, and the SN500 at $840/t-$860/t. Bright stock was assessed at $870/t-$890/t FOB Asia.

Group II 150N was mentioned at $750/t-$770/t, while the 500N/600N was heard at $830/t-$860/t, all FOB Asia.

In the Group III segment, the 4 centiStoke and 6 cSt grades were hovering at $880-$900/t and $860/t-$880/t, respectively. The 8 cSt was unchanged at $770/t-$790/t, FOB Asia.

Upstream, crude oil futures dropped slightly on Thursday, slipping from three-and-a-half year highs on the back of high output in Russia, the United States and Saudi Arabia. Unplanned supply disruptions in Canada, Libya and Venezuela and healthy global demand capped losses, however.

Brent August futures was trading at $77.54 per barrel on the London-based ICE Futures Europe exchange on June 28, up from $73.49 per barrel on June 21.

With few surprises affecting the Asian base oil trade, market players were able to focus some of their attention on discussions taking place at the 12th ICIS Asian Base Oils and Lubricants Conference in Singapore this week.

A few of the main topics presented there included the ongoing shift in trade patterns, the influence of electric vehicles on lubricants, new emission regulations, business opportunities in Southeast Asia, and innovations in motorcycle engine oils, among many others.

The trend towards the use of lighter viscosity base oils to meet more stringent automotive lubricant specifications and help improve fuel efficiency and lower emissions was also a common point in a number of presentations.

ExxonMobils announcement about a future expansion at its Singapore refinery, which would allow the producer to manufacture additional volumes of Group II base oils and clean fuels, also came under discussion.

While some market players wondered whether the added capacity could be absorbed given the general perception that the market is already oversupplied, and that demand growth appears rather flat globally, the refiner remains confident that base oil requirements in Asia will continue to grow steadily, and that the plants economy of scale and advanced technology will offer the producer a competitive edge.

Gabriela Wheeler can be reached directly at

LubesnGreasesshall not be liable for commercial decisions based on the contents of this report.

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