Asia brightstock edges higher on healthy demand

SINGAPORE (ICIS)–Asia’s brightstock spot prices continued to climb on the back of healthy demand amid snug availability of spot cargoes.

On 4 July, brightstock prices were assessed at $1,160-1,170/tonne FOB (free on board) Asia, firmer by $5/tonne from the previous week, according to ICIS data.

During the week, a deal for 1,000 tonnes of southeast Asia-origin brightstock was concluded at $1,170/tonne FOB Asia – reflecting an increase of around $5-10/tonne from discussions and deals heard throughout May and June.

In June, brightstock prices were largely capped at $1,165/tonne FOB Asia, as producers held on to firmer selling ideas, limiting trades, according to ICIS.

Supply of brightstock in Asia is expected to tighten, with the expected shutdown of CPC-Shell Lubricants’ (CSLC) 250,000 tonne/year base oils plant in Taiwan in November this year, while other regional producers have reduced output because of squeezed margins from other Group I grades, such as SN150 and SN500, according to market players.

Meanwhile, healthy demand from the key Chinese market continued to lend support to brightstock spot prices, market sources said.

Some market players, however, expect brightstock prices to peak in the near term at the onset of colder weather in northeast Asia from September.

Demand for brightstock cargoes typically weakens towards the end of the year as this type of base oils solidifies in colder temperature, posing logistics difficulties.

In certain markets like Thailand, domestic demand slows down in August, market players said.

Additional reporting by Veena Pathare

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections