Tight base oil supply and steady buying interest for the heavy grades were still the driving forces behind climbing spot prices in Asia, but there were some indications that requirements may be starting to weaken in key markets such as India and China. The restart of base oil plants following routine turnarounds was also expected to help alleviate the current tightness and price pressure, although it may take time for the market to feel that impact.
The alarming surge in coronavirus cases, hospitalizations and deaths in India, together with talk of a potential country-wide lockdown, have increasingly sown seeds of concern regarding lubricant consumption. The population’s mobility and activities would be reduced, leading to a possible slump in fuels and lubricants demand. Blenders continued to secure base oils to run operations, but were more cautious about the volumes and prices they were willing to pay. As a result, the gap between prices in India and the rest of Asia was widening.