Hyundai Shell Base Oil reported a strong operating profit for its lube base oil segment for the third quarter, improving from an operating loss in 2019’s third quarter.
The joint venture between Hyundai and Royal Dutch Shell posted operating profit for its base oil segment of ₩15.8 billion (U.S. $14.4 million), improving from a ₩4.8 billion loss in 2019’s third quarter.
Hyundai Oilbank, which owns 60% of the joint venture, said in its earnings presentation that supply for the global base oil market was constrained by a reduction in overall refinery operations, and that this helped the joint venture maintain good feedstock to base oil price margins during the third quarter. The company expressed optimism this would continue in the fourth quarter.
The spread in the third quarter for its API Group II 150 neutral oil was $85 per metric ton, up 81% from last year’s third quarter. The spread for its Group II 500 neutral base oil was $219 in the quarter, up 271%.
Hyundai Shell Base Oil operates a plant in Daesan, South Korea, with capacity to produce 25,000 b/d of Group II oils.