Asia Base Oil Price Report(JULY 25, 2017)

2017-07-28   来源： 网友评论 0 条

    Asia Base Oil Price Report
       BY GABRIELA WHEELER • JULY 25, 2017

    Base oil supply and demand in Asia is still deemed balanced to tight, with limited availability in certain segments triggering divergent price trends.

While production levels have improved after a number of plants’ planned and unplanned shutdowns in the region, demand has been more robust for certain base oil grades than others. Demand in general, however, has declined due to a seasonal slowdown in downstream applications.

Other factors, such as the monsoon season in India, were also heard to be impacting the call for product. Base oil requirements in India typically weaken from June to September,

but with activity in the lubricants market more robust than in many other countries in the region, activity has been stronger than expected this year.

Base oil prices in India had remained fairly steady as offers from Middle East suppliers, who are generally quite competitive, had been limited during the Ramadan period. Now, more offers are starting to emerge from sources such as Iran.

Prices for Iranian cargoes of API Group I solvent neutral 150 were heard at between U.S. $570 and $600 per metric ton FOB Iran.

For the SN500 grade, Iranian sellers’ indications into India were close to $710/t CFR India. Meanwhile, SN500 price assessments for cargoes shipped to India during July from various destinations other than the Middle East were heard near $720/t-$730 CFR India.

In other parts of Asia, base stock pricing was said to have stabilized, but buyers were maintaining a cautious attitude and were only securing cargoes for daily operations as there were concerns prices may change in the near term as supply appears to be lengthening.

This was especially apparent in the Group II and III segments, as a Middle East producer was expected to start producing on-spec material next month after an extended, unscheduled turnaround.

The outage occurred at the Shell-Qatar Petroleum Pearl gas-to-liquids (GTL) refinery in Ras Laffan, Qatar, starting last February, and had resulted in tightening conditions of Group II and III supplies as both the producer itself and some buyers had looked for alternative sources of base oils. The Pearl GTL unit can produce 300,000 metric tons per year of Group II and 1,072,000 t/y of Group III base oils, according to Lubes’n’Greases’ Global Guide to Base Oil Refining. The base oil plant was understood to have been restarted and product was expected to be available in August.

At the same time, a second Middle East producer was getting ready to start offering product from its newly expanded plant. Market participants were expected to see Group II and bright stock barrels streaming from Saudi Aramco Base Oil Company’s (Luberef) upgraded plant at Yanbu’al Bahr, Saudi Arabia, in September, according to sources. Luberef’s project would bring 700,000 t/y of Group II to the market.

The company also plans to increase bright stock production because it intends to narrow the supply/demand gap that has ensued from the closure of Group I plants during the past few years. While Group I demand is declining, currently several industrial lubricant formulations and marine oils require bright stock characteristics that Group II oils cannot meet.

Luberef was also expected to come out with Group II base oils with pre-approved lubricant formulations from all major additive companies.

Meanwhile, base oil market participants were also keeping a close eye on crude oil prices.

Crude futures advanced on Monday as Nigeria agreed to adhere to the output cuts that were coordinated by OPEC members last year, according to a Reuters report. U.S. oil imports from Saudi Arabia dropped to the lowest level in seven years, according to data from the U.S. Energy Information Administration last week, while the oil rig count in the U.S. also dipped.

ICE Brent Singapore September futures were trading at $47.82 per barrel on July 24, from $49.06/bbl on July 17. 

Base oil assessments in Asia were stable to soft compared to a week ago, as some grades were exposed to downward pressure on improved availability. Few transactions were reported as participants evaluated market conditions and watched developments on the feedstock and crude oil side.

On an ex-tank Singapore basis, Group I solvent neutral 150 was steady at $700/t-$720/t. SN500 was heard at $860/t-$880/t, and bright stock was at $950/t-$970/t.

Group II 150 neutral was holding at $700/t-$720/t, and 500N at $910/t-$930/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was assessed at $560/t-$580/t, and SN500 was hovering at $760/t-$780/t FOB. Bright stock was holding at $790/t-$810/t.

Group II 150N was down by $20/t this week at $600/t-$620/t, and the 500N/600N grades were unchanged at $830/t-$850/t, all FOB Asia.

In the Group III segment, the 4 centiStoke and the 6 cSt grades were assessed at $760/t-$780/t, and the 8cSt cut at $740/t-$760/t FOB Asia.