Focus by Whitney Shi
SINGAPORE (ICIS)--Brightstock prices in Asia may continue rising on the back of a robust demand amid a seasonal shift to usage of high-viscosity base oils among end-users, while supply is tightening as major regional refineries undergo maintenance, industry sources said on Friday.
On 14 March, brightstock, also known as Group I BS150 base oils, was assessed at an average of $1,140/tonne FOB (free on board) Asia, up by $30/tonne from January, according to ICIS data.
In the key China market, lubricant producers have started purchasing brightstock cargoes from the Asian spot market in late January, in preparation for the consumption peak for high-viscosity grades in March-May, industry sources said.
A number of Chinese buyers procured cargoes early in the year as spot offers from Asian producers have been going up, industry sources said.
In late February, major brightstock producers raised their prices for spot cargoes by $20-30/tonne for March delivery in view of declining supply, they said.
Thailand’s Integrated Refinery & Petrochemicals Complex (IRPC) halted spot supply of brightstocks to China from February given a plan to shut its 350,000 tonne/year base oils plant at Rayong for a month-long maintenance from mid-March.
Japans’ JX Nippon Oil & Energy, meanwhile, is expected to take its 250,000 tonne/year Group I base oils unit at Mizushima off line in May for 100 days of maintenance.
Most brightstock producers in Asia reduced their spot supplies in the first quarter, as most of them are clearing their inventories last year, industry sources said.
Those with maintenance plans, meanwhile, are building up inventory to ensure they can continue to supply to term customers during the shutdown of their plants, they said.
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections