Weekly Asia Base Oil Report: 06 -12May 2023

Read in min


Base oil prices in Asia displayed stability mixed with softness, attributed to the balance between supply and demand. Despite certain grades experiencing limited availability due to ongoing or upcoming turnarounds, the lengthened availability of some base oils caused a decline in prices. While steeper crude oil values provided support to prices during the week, it was emphasized by market participants that oil price fluctuations typically do not have an immediate impact on base oil pricing, except for specific domestic price indications.

Crude Oil’s April Influence on Base Oil

The week witnessed erratic movements in crude oil and feedstock prices, characterized by significant climbs followed by sharp declines. Crude oil futures saw a surge of over 2% on Monday, as concerns of a looming recession subsided, buoyed by positive economic news like a robust job report from the United States. However, the mid-week period marked the end of a three-day rally, as data indicated a potential increase in interest rates by the U.S. Federal Reserve, driven by rising consumer prices in April.

As of May 11, Brent July futures were traded at $75.26 per barrel on the London-based ICE Futures Europe exchange, showing an increase from $73.15/bbl recorded on May 4.

On May 10, Dubai front month crude oil (Platts) financial futures for June settled at $75.18 per barrel on the CME, compared to $71.13/bbl observed on May 3.

While the prices of crude oil experienced fluctuations, the base oil market conditions remained relatively stable compared to the previous week. Demand in most countries either maintained a steady trajectory or saw slight improvement as national holidays concluded, prompting buyers to replenish their stocks.

Base Oil Trends In China

Although many COVID-19 restrictions have been lifted, resulting in increased travel and mobility, certain economic sectors are yet to fully recover. Factors such as inflation, rising interest rates, and challenges in accessing credit are creating a dampening effect on business dynamics.

Manufacturing activity in China has faced challenges due to decreased consumer demand and suppliers focusing on clearing inventories. While logistical issues have been resolved, lower industrial lubricant demand and seasonal slowdowns have affected base oil consumption.

Despite some Chinese base oil plants operating at reduced rates or undergoing maintenance, domestic production is considered sufficient to meet current demands. Expectations suggest a decrease in cargoes from Northeast and Southeast Asia arriving in China in the coming weeks, as import appetite remains subdued.

Moreover, Taiwanese shipments, which are typically significant, are expected to be limited as the sole API Group II producer prepares for a third-quarter turnaround and builds inventories. Only a small shipment of 2,000 metric tons from Onsan, South Korea, is scheduled for delivery in Tianjin in late May.

Base Oil Trends In India

In India, there has been notable activity in certain sectors of the market as buyers aim to build up inventories ahead of the monsoon season, which often brings logistical challenges.

However, in some segments, there is a decreased interest in base oils due to the typical decline in lubricant demand during the rainy season. Buyers remain optimistic about the availability of sufficient domestic supply and fresh imports.

Recent weeks have seen the conclusion of large Group II cargo deals from the U.S., along with the procurement of parcels from Middle Eastern sources. Additionally, a 3,000-ton cargo from South Korea was expected to be shipped to Chennai in early May, while plans were in place to load up to 7,000 tons from Yeosu to Mumbai by the end of May or early June.

Base Oil Trends In Korea

Moreover, the turnaround at a Group III facility in Europe was anticipated to have an indirect effect on the Asian market. The producer’s affiliated plant in South Korea was expected to compensate by producing additional volumes to support the European market during this period of maintenance.

Anticipated production outages in South Korea were expected to limit spot supply, but discussions surrounding several export cargoes took place during the week.

Notably, a 3,500-ton shipment from Ulsan to Tanjung Priok, Indonesia, was quoted for prompt delivery, while a 1,000-ton cargo for early June shipment from Ulsan to Kaohsiung, Taiwan, was also under consideration.

Additionally, about 5,000 tons were projected to have been concluded for South America from South Korea in early May, and approximately 2,000 tons of two different grades were likely to be lifted in Yeosu to Haiphong, Vietnam, in early June.

Base Oil Trends In Asia

The upcoming scheduled turnarounds in Southeast and Northeast Asia may slightly affect the balance between supply and demand.

Maintenance work was planned for a significant facility in Singapore, specifically targeting base oil trains, with an estimated duration of two months starting from the end of April. This maintenance would primarily impact the supply of Group II base oils.

Furthermore, a South Korean producer of Group II and Group III base oils had scheduled an extensive turnaround set to take place in late May, resulting in limited spot availability.

Additionally, a Japanese refiner was preparing for a two-month turnaround at its refinery starting this month, which would likely affect base oil output and restrict supply from this producer.

Base Oil price In Asia

In terms of spot base oil prices in Asia, assessments remained stable to slightly softer, influenced by supply and demand dynamics. Certain grades experienced minor downward price adjustments due to sluggish demand and declining diesel values, which compete with base oils in the feedstock stream.

The price ranges provided below reflect ongoing discussions, bids, offers, as well as transactions and published prices that are widely considered as benchmarks for the region.

Prices in ex-tank Singapore remained stable compared to the previous week. The Group I base oil sn 150 grade maintained its spot price range at $920/t-$950/t, while the sn500 base oil was reported at $1,030/t-$1,070/t. Bright stock prices hovered between $1,260/t-$1,300/t, all ex-tank Singapore.

For Group II, the 150 neutral grade was assessed at $1,010/t-$1,050/t, while the 500N was priced at $1,040/t-$1,090/t, both ex-tank Singapore.

On an FOB Asia basis, Group I SN150 experienced a $10/t decrease, settling at $760/t-$800/t, influenced by lower diesel values impacting light viscosity grades. However, the SN500 remained steady at $870/t-$910/t. Bright stock prices held steady at $1,010/t-$1,050/t, FOB Asia.

In the Group II segment, the 150N grade was within the range of $910/t-$950/t, FOB Asia, while the 500N and 600N cuts remained unchanged at $940/t-$980/t, FOB Asia.

Within the Group III category, prices were stable to slightly softer compared to the previous week. The 4 cSt grade maintained its price range of $1,520-$1,560/t, while the 6 cSt was assessed at $1,490/t-$1,530/t. The 8 cSt grade experienced a $10/t decrease, settling at $1,120-$1,160/t, FOB Asia, for fully approved product.

SN 150 SN 500 Base Stocks N 150 N 500
Singapore $920/t-$950/t $1,030/t-$1,070/t $1,260/t-$1,300/t $1010/t-$1,050/t $1,040/t-$1,090/t
FOB Asia $760/t-$800/t $870–910/t $1,010/t-1,050/t $910/t-$950/t $940/t-$980/t
Price Per Ton Base Oil In Asia 06-12 May 2023



Please share your opinion with us

Your email address will not be published. Required fields are marked *

Get in Touch

Contact us with your number