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Updated to Q3 2018
Supply of lighter grade SN150 remained tight. Ample supply of SN400 in the Chinese local market impacted import sentiment, leading to downward pressure on heavier grade SN500 prices as refiners in northeast Asia and southeast Asia sought to encourage cargo uptake. Brightstock prices also fell on the back of existing supply overhang for July and August shipment lots, leading some buyers to retreat to the sidelines as they were not in a hurry to procure stocks.
Demand for Group I base oils from China was weak amid unfavorable currency exchange rates between the Chinese yuan and US dollar for China-based buyers. Buyers with immediate needs to address were seen purchasing strictly on a need-to basis. In Asia outside China, cargo offtake had also been lacklustre amid poor market sentiment. Demand did not show any signs of improvement despite the approach of the traditional peak demand season in the late third quarter.
Asia’s Group II base oils supply throughout the third quarter was high among regional refiners, especially for that of heavy grade 500/600N. 150N was comparatively tighter in availability. Domestic material was readily available in some markets such as Taiwan despite a turnaround at local refiner Formosa Petrochemical Corp’s (FPCC) unit from 9 July to mid-September. The supply overhang was exacerbated by ample shipments of deep-sea origin material into the Asian region which led to increased competition within Asia.
Demand, especially for heavy grade 500/600N, was slower than that of the second quarter as buyers’ inventories were ample. 150N demand was also relatively muted as compared to the second quarter. Overall demand for Group II imports in China was subdued due to an ample availability of domestic cargoes. Buyers were non-committal in re-stocking of group II cargoes and were mostly purchasing on a need-to-basis as they expected prices to keep dropping amid poor market sentiment.
Northeast Asian-origin Group III base oils prices mostly held steady in the earlier part of the third quarter, as supply and demand fundamentals were mostly balanced. There was an influx of Middle East-origin Group III base oils which contributed heavily to increased supply, but the market for northeast Asia-origin Group III lots was largely unaffected. However, northeast Asian prices slipped in August as a northeast Asian refiner cut its prices in an attempt to move cargoes.
Demand for northeast Asia-origin 4 and 6cst lots was comparatively stronger than that of 8cst, which was more ample in availability. Buyers who had specific requirements for Group III products did not turn to buying Middle East-origin cargoes, leading to limited impact from the supply glut of Middle East material. In developing countries such as India, lower-priced Middle East-origin material was generally more well accepted, which in turn has put pressure on prices of northeast Asia-origin cargoes.
We offer the following regional Base oils-Lubes analysis and news coverage to keep you informed of factors and developments affecting prices in the Base oils-Lubes marketplace.
News & analysis
ICIS price assessments are based on information gathered from a wide cross-section of the market, comprising consumers, producers, traders and distributors from more than 250 reporters world-wide. Confirmed deals, verified by both buyer and seller, provide the foundation of our price assessments.
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The main use for base oils is in the manufacture of lubricants, of which there are many thousands of types.
The Base Oils/Lubes Pricing report delivers daily and weekly price assessments, market news and analyses for the Asian base oils/lubes market. Whether you are a buyer, trader or seller, our pricing information gives you access to time-sensitive deals, offers/bids and price movements. Historical pricing data is also available.
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The report also includes trade flows and demand from the finished lubricants sector. Shipping and feedstock information completes the market coverage.
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