In the first quarter, SK Enmove and GS Caltex saw significant growth in operating profits for their base oils and lubricants division, with a 22% and 77% increase respectively. Meanwhile, S-Oil’s base oils and lubricants business maintained a steady operating income. Factors such as China’s reopening, recovering transportation demand, and inventory stockpiling played a role in boosting base oil demand during this period.
In the first quarter, GS Caltex’s base oils and lubricants division achieved an operating profit of ₩125.6 billion, marking an impressive 77% surge compared to ₩71.1 billion.
The quarter also saw a substantial increase in sales revenue, with a 27% rise to ₩577.5 billion.
GS Caltex highlighted the favorable base oil price spread during the first quarter, outperforming refining spreads. The increased demand for base oil was attributed to the reopening of China and a recovery in transportation demand.
During the first quarter, SK Innovation’s SK Enmove base oils and lubricants business recorded an operating profit of ₩259.2 billion, marking a 22% growth.
Despite increased sales and lower oil prices reducing costs, sequential operating profit declined 3% due to sales price adjustments and a decrease in foreign exchange rates impacting price margins.
Sales for the quarter rose by 25% to ₩1.3 trillion.
S-Oil’s base oil and lubricants business recorded an operating income of ₩195.8 billion, showing a slight increase compared to ₩195.3 billion previously.
Sales revenue for the segment experienced a 3% growth, reaching ₩762.5 billion.
The company highlighted that the product spread between composite base oil and vacuum gas oil decreased slightly to $67 per barrel in the first quarter, compared to $73.50/bbl in the previous year’s fourth quarter. However, it remained higher than usual due to lowered feedstock cost. Year-on-year, the spread of $67/bbl significantly exceeded the $44.50 mark from the same quarter last year.
S-Oil emphasized that base oil fundamentals strengthened during the first quarter, with demand rebounding after the winter off-season. Factors such as the reopening of China and the Chinese New Year contributed to the recovery in base oil demand, along with inventory stockpiling ahead of the peak season.