This can partly be attributed to rising selling indications from regional producers. “Most traders and refiners marked up their offers sharply in March,” a Taiwanese market participant explained.

An offer for API Group II 600 neutral was heard at U.S. $710 per metric ton, but most buyers considered this level to be unworkable. In comparison, prices for 500/600N material were hovering at $620-$650/t FOB Asia in early February.

In the Group I segment, bright stock prices have also edged up by around $20/t on tightening conditions.

Participants explained that many buyers had come back to the market in February, when crude oil futures seemed to be recovering and buyers thought base oil prices had found a bottom.

A similar situation applied to the lubricants business, where requirements experienced an uptick last month.

Suppliers agreed that customers had placed many orders in February, above and beyond those necessary to cover regular needs, aiming to secure product on concerns that prices would start to move up.

As a result, consumers are well-supplied for the near term, both on the base oil front, as well as in the downstream lubricants segments, leading to less buoyant buying interest. “This month, lubes demand was fine, but it was weaker than February,” a supplier explained.

Some sellers expressed concerns that April would also see lackluster appetite for base oils because consumers have ample stocks and crude oil prices remain difficult to predict.

In China, buying appetite has improved since the beginning of the month, and supply appears to be more balanced against requirements, although this could be attributed to other factors besides demand.

Several producers were heard to have reduced operating rates in order to avoid inventory buildups during the last few months, and were still heard to be keeping rates below capacity.

There have been a couple of turnarounds at Chinese base oil plants since the beginning of the year as well, including one at Fushun Petrochemical’s 260,000 metric tons per year Group I plant, which was shut down for maintenance in January and was expected to come back on stream at the end of March. Fushun Petrochemical is a PetroChina subsidiary.

Formosa Petrochemical’s Group II plant in Taiwan has also undergone a turnaround in March. The plant can produce 600,000 t/y and Formosa typically exports a large portion of its output to China.

China was heard to have increased base oil exports too, particularly during the slower months of January and February as a means to destock growing inventories.

Lackluster buying interest ahead of the Lunar New Year in late February had resulted in rising stocks, both of imported material and local supplies. However, requirements improved in March, and resulted in higher domestic price indications.

In India, demand for Group I oils remains firm and bright stock prices were heard to have climbed by $10/t month on month on snug availability.

Several parcels of Group II oils of Northeast Asian origin were heard to be on offer into India, and a number of U.S. cargoes are also anticipated to reach Indian shores in the next few weeks, exerting downward pressure on regional offer levels.

Base oil prices in Asia were underpinned by fairly steady demand and firm crude oil values this week, and some cuts edged up on higher bids and offers.

On an ex-tank Singapore basis, Group I solvent neutral 150 prices were heard at $660-$680/t, and SN500 was assessed up by $10/t at $680-$720/t. Bright stock was also up by $10/ton at $1,020-$1,060/t.

On an FOB Asia basis, Group I SN150 was unchanged at $540-$570/t FOB, while SN500 climbed $20/t to $580-$600/t FOB. Bright stock prices also moved up by $20/t to $1,020-$1,040/t FOB.

Group II prices edged up by $10/t to $570-$610/t FOB Asia for 150 neutral, to bring them more in line with current discussions, and were also revised up by $10/t to $640-$680/t FOB Asia for 500N.

Group III prices were stable, with the 4 centiStoke and 6 cSt oils heard at $960-$980/t FOB Asia. The 8 cSt grade was heard at $760-$780/t FOB Asia.

Shipping activity was brisk; several inquiries to move product from South Korea to destinations throughout Asia emerged this week. A 1,000-metric ton cargo of two base oil grades was quoted for Yeosu to Nantong, China, for April 11-20 shipment. A second 3,000-ton parcel was being worked on for Yeosu to Nantong for April 6-10 lifting. A 2,500-ton lot of two grades was also on the table for Yeosu to Taichung, Taiwan, for April 11-20 loading. A 500-ton parcel of 600N was being discussed for Yeosu to Taichung for Apr. 4-10 shipment. A 1,000-ton cargo was expected to be shipped from Yeosu to Dongguan, China, between April 11-20. A 350-ton lot was discussed for Onsan to Wakayama, Japan, for April 2-7 shipment. A 1,800-ton parcel was likely to be shipped from Onsan to Taicang, China, for April 13-20 loading.

There was also a 4,000-ton cargo being quoted for Hamriyah, United Arab Emirates, to Mumbai, India, for prompt shipment.

Upstream, April ICE Brent Singapore futures were trading at U.S. $56.33 per barrel in afternoon trading on March 30, compared to $54.41 per barrel on March 23.

Gabriela Wheeler can be reached directly atgabriela@LubesnGreases.com. U.S. posted paraffinic base oil prices, as reported each week in Lube Report from Jan. 2004 to the present, are now available in Excel format. Seewww.BaseOilPrices.com.